Ten-month-old New York investment firm Box Equities has found a private equity investment partner to help bankroll its strategy of targeting retailers’ industrial properties in markets less susceptible to the labor shortages disrupting supply chains during the COVID-19 pandemic.
Box Equities secured a joint venture agreement with Artemis Real Estate Partners, a Washington, D.C.-based private equity firm with $4.7 billion of assets under management at the end of 2020. The team is closing its first investment this week, acquiring a 500,000-square-foot warehouse in North Carolina leased to clothing company Hanesbrands.
Mac Dabah, managing director at Box Equities, told CoStar News in an email the pair are planning to make more acquisitions over the next 12 to 24 months.
The deal exemplifies Box Equities’ approach to real estate, which includes buying commercial properties in smaller cities with strong labor markets where Dabah said he’s seeing “substantially less” turnover.
Urban Land Institute, a policy and research group, recently warned labor and product shortages caused by the pandemic are one of the biggest risks to retail supply chains and, in effect, the properties involved. That has propelled demand for logistics real estate, particularly in secondary and tertiary markets, with smaller investor groups and private buyers leading the charge, ULI said.
Warehouse space and a reliable labor force have become increasingly more valuable as e-commerce skyrockets, according to Dabah. “As the supply chain crisis forces retailers and wholesalers to take a fresh look at facilities, locations and labor availability, we are seeing many new opportunities which will accelerate the growth of this joint venture,” he said.
Besides Dabah, Box Equities’ other co-founders include retail and real estate veterans Haim Dabah, Ori Schwartz and Michael Dabah. Haim Dabah has over 35 years of relationships with corporate executives at major retailers such as Walmart, Target, Macy’s and Kohl’s.
“The current supply chain disruptions that we are seeing will continue into the foreseeable future,” Haim Dabah said in a statement. “Retailers and manufacturers today need a reliable and efficient labor force to move the products to consumers. By investing in areas with loyal labor pools, we are mitigating many of the problems that the logistics industry is currently experiencing.”
It was the combined retail, logistics and real estate backgrounds of Box Equities’ founders that attracted Artemis.
“Box Equities has an innate understanding of the interaction between retailers and logistics, which gives our venture unique expertise to identify new opportunities,” Mike Vu, principal at Artemis, said in a statement.
The Hanesbrands warehouse is located at 705 Canterbury Road in Kings Mountain, North Carolina. Box Equities declined to disclose the price. The building was last purchased for $24.17 million in January 2015 by seller Ladder Capital. Hanesbrands’ lease runs through September 2030.
The deal grows Box Equities’ portfolio to more than 2.3 million square feet of industrial space.
For the Record
Marc Belsky brokered the joint venture partnership.