By Meghan Hall
Amazon-leased assets continue to attract premium prices, as seen by a recent West Sacramento deal. In a transaction that closed in November, St. Louis, Mo.-based ElmTree Funds acquired a warehouse for about $91.9 million, the Sacramento Business Journal has reported. The seller, according to public records, is an entity affiliated with NorthPoint Development.
The asset is located at 3620 Ramos Drive and is part of the Southport Business Park. The facility is known as “DSM4” and operates as an Amazon fulfillment center. The single-tenant, Class A building totals 182,226 square feet, according to data from CommercialCafe. The building was completed just this year, includes 307 parking spaces and also sits on just under 36 acres of land.
The building is surrounded by other commercial and industrial spaces occupied by Pitco Foods, Living Spaces, California Sierra Express and others. Downtown Sacramento is easily accessible, as is Interstates 80 and 5.
Betting on buildings leased to Amazon seems like a safe bet for investors, who are carefully watching the company’s rapid growth. In recent months, Amazon has announced plans to 125,000 employees throughout the United States as it expands its logistics footprint, according to a fall statement from the company. The company also plans to hire 40,000 corporate and tech-oriented jobs. Over the course of the year, Amazon opened 250 new fulfillment centers, sortation hubs, regions air hubs and delivery stations. In September of 2021, it opened 100 new buildings alone and has hired more than 450,000 since the beginning of the pandemic.
ElmTree Funds describes itself as a company that “drives growth with mission critical real estate.” It actively seeks to identify built-to-suit, net-leased assets.
“The demand for industrial investments continues to outpace every other sector in real estate. ElmTree Funds, through our corporate and developer relationships in conjunction with our development and construction expertise, is well-positioned to capitalize on the opportunities in this environment,” said James Koman, CEO and Founder of ElmTree, in a recent statement explaining the company’s recent activity. As online purchasing increases, we see an insatiable growth for shippers, operators and retailers to continue their growth trends for the foreseeable future. Our ability to raise capital and help developers and investors meet their needs through investing or building is a win-win situation for everyone in today’s marketplace. Our platform, including under-contract assets, anticipates managing $7.3 billion of assets, measured on a gross basis, reflecting these trends.”
According to a September statement from the company, ElmTree has deployed $4 billion in capital over the last 12 months, acquiring 47 properties totaling more than 16.5 million square feet. In the next year, the company seeks to acquire an additional $3 billion in assets.