Goodman, CCP Investments Boost U.S. Logistics Commitment to $5.5B

Goodman Commerce Center at Eastvale in Eastvale, Calif. Image courtesy of Goodman Group

Goodman Group and Canada Pension Plan Investment Board have expanded their U.S. logistics partnership, committing an additional $2.5 billion of equity to the Goodman North American Partnership for a total equity commitment of $5.5 billion.

Established in 2012, the GNAP has a 5/45 equity structure, so Goodman will allocate $1.4 billion and CPP Investments will add $1.1 billion. The partnership invests in high-quality logistics and industrial properties in key markets including Los Angeles, Southern California’s Inland Empire, New Jersey and Pennsylvania. It began with an initial $890 million commitment and the GNAP assets have grown to $3.3 billion and approximately 16 million square feet under management. With the increased equity allocation and allowing for a moderate amount of debt, GNAP’s total investment capacity will increase up to $7.5 billion and provide significant capacity for acquisitions and development.

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In August 2018, the partners boosted their Asian logistics investment commitments, adding $1.75 billion of equity to the Goodman China Logistics Partnership, with CPP Investments allocating $1.4 billion and Goodman $350 million. The GCLP, which has a total equity commitment of $5 billion, was established in 2009 to invest in high-quality logistic properties in prime locations across Mainland China. The partnership’s portfolio has grown to about 33 properties totaling approximately 26.9 million square feet.

North American Growth

Anthony Rozic, CEO, Goodman North America, said in a prepared statement that the portfolio is concentrated in key urban locations close to large consumer populations, allowing its customers to meet growing demand for faster last-mile deliveries. Rozic noted GNAP has acquired more than 200 acres in key infill locations in the last six months and has the momentum, expertise and capital to continue acquiring and developing new properties in its target markets.

Peter Ballon, managing director, global head of real estate, CPP Investments, said in prepared remarks that fundamentals in the logistics sector continue to strengthen, driven by the rapid growth of e-commerce and ongoing supply chain modernization. He also noted that record sustained rent growth and occupancy levels reflect those changes.

In addition to the areas GNAP has previously targeted for investment, opportunities will also be sought in San Francisco and Seattle on the West Coast and Philadelphia on the East Coast. Other key logistics hubs based around inland ports, intermodals and seaports will also be considered. A map on the Goodman website indicated the partnership would be looking at Dallas, Houston, Atlanta, Miami, Chicago and Savannah, Ga., as well.

Southern California Lease

In May of last year, Goodman signed a 300,000-square-foot lease with Mutual Trading Co. at the Goodman Logistics Center El Monte, a 1.2 million-square-foot logistics facility in El Monte, Calif. The Class A facility was expected to be completed by the end of 2019. Mutual Trading Co., one of Japan’s leading food, beverage and restaurant supply companies, said it planned to consolidate 5 U.S. locations at the El Monte site, which is located less than 1 mile from Interstate 10 and 4 miles west of I-605. It is also 18 miles from downtown Los Angeles, where Mutual Trading has a showroom, and 24 miles from the Port of Los Angeles/Long Beach in Southern California.