As the commercial real estate industry has focused on larger and larger industrial warehouses, the low-profile truck terminal has gained momentum to attract investors across the country.
U.S. truck terminal sales more than doubled to a record $1.4 billion in the past four years as the pandemic accelerated e-commerce growth and increased investor demand for the type of property used in the growing effort to get goods to the gates.
This increase in demand preceded sales of more than $1 billion so far this year of properties used for freight forwarding, truck maintenance and equipment storage in the United States, according to the CoStar data. Buyers of real estate, a crucial link in the U.S. supply chain, include companies such as Bridge Logistics Properties, based in Salt Lake City, and Realterm Logistics, of Annapolis, Maryland.
“Truck terminals are a really difficult type of product to buy because there is pent-up demand from e-commerce businesses, retailers and trucking companies for facilities to move goods and consolidate products,” said said Paul Jones, managing director of Bridge Logistics, in a “At the same time, they are very difficult to get approved and built because municipalities and communities really don’t like the stigma of truck traffic.”
Most truck terminals, an important link in the U.S. supply chain, are owned by longtime operators and rarely go up for sale — and those that do are experiencing record investor demand that is making it difficult to find a terminal to buy. Large, investor-controlled funds such as the global banking giant JPMorgan Chase raised billions to buy the properties.
“Tanks and terminals have always been owner-occupied, and there aren’t many of them,” Patrick Wood, JLL’s industry broker, told CoStar. “Because the supply is so limited, the occupier who very rarely takes control of it will leave.”
Unlike in-demand warehouses used to store goods which can be millions of square feet under one roof, truck terminals typically range from 15,000 to 100,000 square feet with plenty of parking for trucks and trailers. As a result, proposals to build truck terminals and tank yards are often opposed in communities who are wary of potential traffic congestion, pollution, and the view of parking lots and tank yards for trucks and trailers.
Many terminal and tank yard owners in California’s western Inland Empire along Interstate 10, one of the nation’s busiest freight and distribution corridors, sold there years ago their land was taken over by large industrial developers who were piecing together multiple plots to build huge warehouse and distribution parks, Bois says.
“This area was one of the most actively speculated land markets in the country,” Wood said. “Truck terminals and storage facilities have had to find other locations, and when the supply of one type of product decreases, it creates greater demand for what is still available.”
The latest wave of high-priced terminal and tank farm purchases are persuading more longtime owners to sell, Wood said.
“Some of these owner-operators are making more money on their real estate than they ever made in their operating businesses,” he added.
Installations are often not listed or marketed for sale. Jones of Bridge Logistics Properties said his company was in the right place at the right time to purchase a rarely available truck freight loading terminal in Southern California’s Inland Empire industrial hub. But it was expensive.
The terminal on 14 acres at 2650 S. Willow Ave. in Rialto became available after Canadian transportation and logistics company TFI International bought it last year as part of an $800 million purchase of UPS’s freight operations. Bridge paid $83 million – one of the largest amounts ever paid for a truck terminal in the Inland Empire – for the 41,100 square foot building with a truck wash and nearly 7 acres for storage trailers.
“TFI was looking to sell some facilities to help fund the purchase of UPS Freight and we lucked out,” said Jones, who along with other industrial real estate executives helped out last year. to launch the logistics division of Salt Lake City-based real estate investment management giant Bridge. Investment Group, CoStar News said. “We sent an unsolicited offer and we were at the right time and in the right place.”
Bridge quickly amassed a portfolio of nearly 15 million square feet of warehouses, terminals, storage facilities and other industrial properties purchased or under purchase agreement.
Local governments often don’t have much incentive to approve terminal or tank farm projects, which, unlike modern warehouses and manufacturing facilities, don’t employ large numbers of workers or generate revenue. high tax revenues, said David Eseke, an industry broker at Cushman & Wakefield in Dallas.
Additionally, city leaders often face pressure from residents opposed to projects due to fears that they will lead to traffic, accident risks and air pollution. In a recent example, elected leaders in Banks County in northeast Georgia voted to reject logistics company Southeastern Freightline’s proposal to build a terminal with 150 dock doors.
Commissioners in the largely rural county turned against the project due to Southeastern estimates that the terminal would create 2,300 higher-than-expected truck trips per day along routes shared by school buses in the morning and afternoon. afternoon.
“We know that a truck going down 55 miles an hour can’t stop if a school bus suddenly pulls out,” said Ellen Hulford, one of 20 residents who spoke out in opposition. to the plan during the committee meeting on August 23. “I’m not opposed to growth; it’s inevitable and it happens everywhere, no matter where you live, but your obligation is to do what’s best and what makes sense for the county as a whole. ”
The commissioners voted 5-0 to reject the proposal.
Between lack of tax revenue and job creation and opposition, it’s not uncommon for local planning departments and leaders to kill terminal and tank farm proposals from developers.
“From a city’s perspective, the inherent benefits just aren’t there,” JLL’s Wood said. “Truck yards just don’t look as good as those modern, state-of-the-art industrial buildings that are so perfectly designed they look like office buildings.”