A new venture between Box Equities and Artemis Real Estate Partners has made its first acquisition, a 500,000-square-foot warehouse in Kings Mountain, N.C., with a single tenant, HanesBrands.
The venture and the acquisition were revealed Monday by Box Equities, a real estate investment group formed earlier this year by the Dabah family, and Artemis, a Washington, D.C.-based private equity firm with $6 billion in capital to invest in real estate.
“The team at Artemis has knowledge and relationships with the market that complements ours. We can do more together than either of us could do alone,” said Haim Dabah, cofounder and chairman of Box Equities. “We are focused on industrial real estate in the consumer goods space.”
Dabah would not disclose financial details of the acquisition. He said future acquisitions by the partnership could be structured in different ways.
He also said Box Equities will continue to work on real estate deals separate from Artemis, and that Box Equities has its own war chest consisting of family, private equity and family office money.
“The partnership allows us to scale much faster,” said Mac Dabah, cofounder and managing director of Box Equities, and Haim’s son. Another son, Michael Dabah, is cofounder and general counsel for Box Equities. Ori Schwartz serves as director of acquisitions.
Artemis provides “a wealth of knowledge, relationships and resources,” Mac added. “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.”
“We very much value the Box team’s deep retail experience and relationships which give the partnership differentiated advantages,” Mike Vu, principal at Artemis, said in a statement. “Box Equities has an innate understanding of the interaction between retailers and logistics, which gives our venture unique expertise to identify new opportunities.”
Artemis invests in real estate with different levels of risk and requirements that could involve different degrees of building enhancements, management changes or tenant changes.
The 10-month-old, New York-based Box Equities now has a portfolio of six industrial real estate properties totaling more than 2.3 million square feet. “By the end of the year, we expect to add another four properties,” Mac said.
“Our strategy has been to find properties in secondary markets outside of big cities where there is a stable pool of loyal labor and less turnover,” Haim explained.
The company is not interested in major markets like Secaucus or Edison, N.J., or New York City. Nor is it interested in last-mile distribution facilities, the kind that Amazon needs for speedy delivery close to customers, though Box Equities doesn’t exclude the possibility.
Warehouse space and reliable labor forces have become more valuable as e-commerce continues to skyrocket, and real estate firms, private equity firms, landlords and retail and e-commerce companies like Amazon are amassing warehouses and distribution centers. There’s greater pressure on companies to increase their manpower and distribution and fulfillment centers to support the increasing consumer demand for products. The global pandemic, supply chain bottlenecks and the labor shortage have compounded the challenges.
The Dabahs said their company works closely with local economic development authorities to create jobs and generate investment opportunities in markets around the country.
“The current supply chain disruptions that we are seeing will continue into the foreseeable future,” said Haim. “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.”
Marc Belsky, the real estate equity brokerage firm bearing his name, brokered the partnership. “This very strategic partnership joins the $6 billion private equity fund with a team whose relationships extend directly into the C-suite of many Fortune 500 retailers,” Belsky said in a statement. “This partnership will provide Artemis and Box with the ability to quickly capitalize on market and tenant demand, as well as leasing insight not available to others.”
Haim Dabah, a 40-year retail and fashion industry veteran, and his family have a long history of starting and running businesses in fashion, retail and technology, including investments in Stylitics, Kidbox and Talk Space, and formerly Regatta, which developed private labels for retailers such as Simply Vera by Vera Wang for Kohl’s.
Aside from helping to pioneer private brand development, Haim and his brothers Ezra and Isaac founded Gitano, which peaked into a major denim label for the mass market in the 1980s. Ezra is also chief executive officer of Kidpik and Nina Footwear Corp.