Warehouse Demand May Post Another 191M SF by 2020
Orgill Distribution Center, 550,000-square-foot class-A facility, will soon expand by almost 329,000 square feet by mid-2019 in response to growing e-commerce logistics demands.
KILGORE, TX—Orgill Distribution Center, a 550,000-square-foot class-A facility, was completed in 2007, but will soon expand by almost 329,000 square feet by mid-2019 in response to growing e-commerce logistics demands. And, the eastern Texas center was recently purchased by WP Carey Inc. at an undisclosed price.
The asset is fully tripled net-leased to Orgill, the world’s largest independent hardware distributor. The property serves as its distribution center for Texas, Oklahoma, Louisiana and southern Arkansas. Situated on 65.25 acres at 7001 Elder Lake Rd., Orgill Distribution Center is south of Interstate 20 and approximately 70 miles west of Shreveport, LA.
An HFF team marketed the property on behalf of the seller, Elysian Partners LLC. The HFF investment advisory team included managing director Adam Herrin and director Stephen Bailey.
“We were excited to handle this sale for ownership,” Herrin tells GlobeSt.com. “This is a critical facility for Orgill and the 25-year lease showed their commitment to the area. The investor interest was strong irrespective of the smaller market location.”
The sharp rise in e-commerce sales has put pressure on retailers to implement omnichannel strategies for on-line order fulfillment, according to a report by CBRE. Part of this implementation has shifted goods from retail shelves to warehouse racks, increasing industrial warehouse demand. For every $1 billion increase in e-commerce sales, an estimated 1.25 million square feet of warehouse space is needed to keep up with demand. Thus, e-commerce generated warehouse demand could grow by an additional 191.2 million square feet from now to 2020.
Join the 17th Annual GlobeSt Net Lease Conference (formerly a RealShare event) on April 3 and 4 in New York City alongside the industry’s most influential and knowledgeable real estate executives from the net lease sector. Click here to register and view the agenda.