Warehouse / Distribution
WHARTON INDUSTRIAL, formed in late 2017, has quickly become a prominent investor/developer of warehouse distribution facilities. The focus on industrial real estate stems from the firm’s conviction about the transformative change e-commerce is having on the way goods will be distributed in the years ahead. To capitalize on this, Wharton Industrial has focused on the development and redevelopment of big box distribution facilities, and “last mile” warehouse properties. Representative transactions of its nearly 11 million SF of activity include:
1.5 Million SF, $225 Million Warehouse Development, Mesa, AZ
Wharton Industrial acquired a 100-acre site in Mesa, AZ and plans to invest $225 million to develop an 11-building, 1.5 million-square foot Class A industrial park, to be known as “The Hub@202.” The buildings will range in size from 65,000 square feet to 270,000 square feet and will feature 28- to 32-foot clear heights; 73 trailer parking spaces; 60-foot speed bays; and 1,429 car parking spaces.
The site is among the last large contiguous land parcels remaining in the area and is centrally located in the highly desirable Southeast Valley submarket of Metropolitan Phoenix — one of the fastest growing industrial markets in the country and poised to lead the nation in industrial rent growth over the next five years.
The project is part of Wharton Industrial’s strategy of making strong conviction investments in markets the company believes are on the cusp of significant change stemming from the rise of ecommerce. Mesa squarely fits this profile as it is emerging as the “digital desert” with companies like Microsoft, Google, Apple and Amazon having a strong presence. Moreover, the area is home to other “new age” companies involved in chip manufacturing (Intel and Taiwan Semiconductor), aerospace (Boeing, Lockheed) and electric vehicles (Lucid).
The HUB@202 is being positioned to cater to firms seeking a presence in the East Valley which are attracted to the strong, skilled labor market in the area and the ease of access to the greater Phoenix area, as well as California and Nevada.
1.1 Million SF Portfolio of 32 Last Mile Warehouses, Pennsauken, New Jersey
Wharton Industrial acquired 32 warehouses in Pennsauken, New Jersey from the Bloom Organization (the original developer of the properties) in an off-market transaction. The assets are located 15 minutes from Center City, Philadelphia and increase the company’s footprint in the market. Given their access to nearly 6 million people in the metro area, the assets serve as a key last mile distribution point for the portfolio’s regional and national tenants such as Nestle, PepsiCo and Sprint.
The properties, known as Twinbridge Industrial Park and Veterans Industrial Park are in proximity of each other and represent over 30% of the inventory of investor-owned industrial in Pennsauken. Wharton Industrial plans on upgrading the common areas of the property with enhanced landscaping, signage, lighting and to create a new web portal to enhance tenant relations (e.g., service calls, leasing matters). In addition, the firm will be unifying the parks and re-naming them Twinbridge Center and Twinbridge Center West and rebranding the combined properties with a new logo and color schemes.
The properties will benefit significantly from the further emergence of Philadelphia as a major hub for distribution on the east coast. Additionally, there has been an increasing migration of tenants from the New York metro area and northern New Jersey to south New Jersey/Philadelphia seeking greater affordability. These factors coupled with the scarcity of available inventory and land for development, portend a continued rise in rents.
Wharton Industrial is partnering with Walton Street Capital on this project and received debt financing from Nuveen.
283,000 SF Last Mile Warehouse, Philadelphia, Pennsylvania
Wharton Industrial acquired a 283,000 SF warehouse in Philadelphia, PA and immediately commenced a major renovation program to convert the former subway repair facility into a top-tier last mile warehouse. The improvements included removing rail beds inside the facility, replacing the entire roof, leveling interior floors, installing LED lighting, upgrading loading docks, and repaving the parking areas. Wharton Industrial also branded the property, “SoPhi Logistics Center.” Nine months after acquisition, Wharton Industrial was able to secure a 10-year lease with a major e-commerce company for the entire building. The tenant is utilizing the property as a “mission critical” facility for its same-day delivery service.
The Property is strategically located for e-commerce distribution / fulfillment as it is within one hour of 6 million people and one day’s drive of half the US population. In addition, the SoPhi Logistics Center sits at the nexus of I-95, I-76, Center City, the port of Philadelphia, and the Philadelphia International Airport. Wharton Industrial is actively seeking last mile warehouses and believes this asset is representative of the unique opportunities in transforming older industrial assets into modern facilities geared towards the needs of today’s users.
After completing the renovation program and leasing the facility, Wharton Industrial sold the property and achieved a 208% gross IRR on the transaction.
Wharton Industrial partnered with Walton Street Capital on this project.
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l MM SF Warehouse Development, Atlanta, Georgia
Wharton Industrial signed a 20-year lease for its nearly 1 million square foot development project in Atlanta, GA with PVH Corp., the company behind clothing brands including Calvin Klein and Tommy Hilfiger. The recently finished building, which sits on over 80 acres and was leased prior to completion, was developed by Wharton Industrial, Red Rock Developments and an affiliate of Starwood Capital Group.
Located immediately south of downtown Atlanta, the property is strategically situated in proximity of key modes of transportation including the CSX rail intermodal, the Hartsfield Jackson International Airport, and interstate highways I-85 and I-75. Neighbors of the project include Duracell, Clorox, Smuckers, and Google.
617,000 SF Warehouse Development, Ocala, Florida
Foreseeing the strategic importance of Ocala, FL with respect to its location and proximity to labor, Wharton Industrial acquired a 46-acre parcel of land in the market and developed a 617,000 SF state-of- the-art warehouse / distribution facility. Prior to the completion of the project, the firm signed a 10-year lease with a major e-commerce company for the entire building.
Ocala is the Northern Apex of the Central Florida distribution market on the I-75 corridor, where the project is located. 70% of Florida truck traffic goes through this corridor. The area also benefits from an abundant and qualified labor force, with approximately 600,000 people within a one-hour drive of the property. Neighbors of the project include Chewy.com, AutoZone, and FedEx. Wharton Industrial partnered with Red Rock Developments, and Westport Capital Partners on the project.
600,000 SF Warehouse Development, Greenville, South Carolina
Wharton Industrial acquired an approximately 47-acre parcel of land in Greenville, SC and has developed 2 state-of- the-art warehouse / distribution facilities totaling 600,000 SF. Greenville has become a hub of industrial activity centered around the BMW’s 6 million SF manufacturing facility.
Located within 4 miles of BMW and minutes from I-85, the property is strategically located in the heart of Greenville’s commercial area. Neighbors of the project include Michelin, Valeant Pharmaceuticals, and Amazon.
The warehouses are located within a master-planned industrial development that will eventually contain up to over 5 million square feet. Wharton Industrial is partnering with Red Rock Developments and Starwood Capital on the project.
580,000 SF Warehouse Acquisition, Hazleton, PA
Wharton Industrial purchased the former Office Depot distribution center and negotiated a sale/leaseback for 40% of the building. Upon the acquisition, the firm undertook a capital improvement program which included installing a demising wall to bifurcate the space, repaving the parking area, which included adding a stretch of road to complete a loop around the building, and installing LED lights.
Located in the Humboldt Industrial Park, the property benefits from easy access to Interstates 80, 81 and 76 and a strong labor pool. Further, the building’s 32+ foot clear ceiling heights and ample parking provides unique attributes in the NE PA market which is accessible to over 30% of the US population within one-day’s drive.
Wharton Industrial partnered with CenterSquare Capital Management on the transaction.
510,000 SF Warehouse Development, Plant City (Lakeland), FL
Wharton Industrial acquired a 34-acre site in Plant City, FL and is developing a 510,000 state-of-the art distribution center on the property. Wharton Industrial sourced, negotiated and structured the off-market purchase with the seller who remained in the transaction with an equity interest.
Central Florida has become a key warehouse distribution market in the southeast US with such tenants as Publix, Krogers, Home Depot, PepsiCo and Amazon. Moreover, the area is on the leading edge of robotics as a number of facilities, either built or under construction, will be fully automated. Driving the activity is its key geographical positioning which provides access to Atlanta and the Port of Savannah to the north, Orlando and Tampa, respectively to the east and west, and Miami to the south.
Wharton Industrial is developing the project with Red Rock Developments and the Carlyle Group.
WHARTON INDUSTRIAL has extensive experience in the acquisition, repositioning and operation of self-storage assets having 10,000 units. The continued demand for rental apartments, which have limited storage space, coupled with the proliferation of on-line purchases portends well for the self-storage industry in the years ahead. In general, Wharton Industrial targets high-barrier to entry markets where it can attain critical mass. Representative transactions include:
New York City Art Storage Warehouses
In two separate transactions, Wharton Industrial, in conjunction with an institutional partner, orchestrated the acquisition of two warehouse properties that primarily cater to the fine art and antiques industries. The purchases resulted in Wharton Industrial having a virtual monopoly on the art storage market in midtown Manhattan. A comprehensive renovation program for both properties was undertaken. Debt financing for both acquisitions was provided by Prudential Mortgage Company. Total capitalization of the two transactions exceeded $80 million.
New York Metropolitan Area Self Storage Portfolio
An affiliate of Wharton Industrial, in partnership with an institutional investor, acquired a portfolio of approximately 6,500 self-storage units from an affiliate of GE. Located in the New York metropolitan area, the facilities required extensive renovations and were repositioned as "The Storage Company" with a new logo and brand identity. The transaction was financed with an acquisition loan from UBS Real Estate Investments, Inc. and equity was provided by a major institutional investor. After successfully repositioning the assets, Wharton Industrial sold the portfolio to an affiliate of Northwestern Mutual Life for approximately $56 million.
Aggregation of Self-Storage Properties in the Hamptons, New York
Wharton Industrial assembled a portfolio of over 2,200 self-storage units from different sellers across three properties located in the Hamptons, New York. While in control of over 80% of the self-storage units in a high barrier-to- entry market, Wharton Industrial, who managed the properties and handled the integration of the assets, significantly raised rents and re-branded the facilities. The portfolio was ultimately sold to a NYSE REIT.