Industrial: James Lambert, Senior Managing Director, Industrial Investments at Elion Partners
Industrial has been one of the most robust segments of the property market, propelled by e-commerce demand that has only grown through the pandemic as more consumers turned to shopping online amid lockdowns.
In April, Elion Partners, a real-estate investment firm that focuses on logistics properties, hired James Lambert, a former Amazon executive who helped spearhead the dramatic growth of the e-commerce giant’s last mile delivery warehouse portfolio, to help it grow its pipeline of urban industrial deals.
Having worked for one of the nation’s most dominant takers of warehouse space, Lambert has an insider’s eye for assets that will appeal space users.
“Everyone in the warehouse business talks about having huge ceiling heights, but for last mile spaces it actually doesn’t matter,” Lambert said. “The amount of parking is the first four priorities. Then it’s simple, how close does this space get you to the customer?”
Lambert just arranged a deal for the firm to purchase a 108,000 square foot warehouse in El Cajon, California, for $16 million and is in the process of closing another deal in nearby San Diego for $22 million.
The company is ramping up to do more buying. It just closed its fifth fund totaling $500 million and is about to begin raising a sixth fund that will be larger.
Because so many investors have crowded into the warehouse market, Lambert said he has been searching for advantages that will allow it to outbid rivals. One idea is to repurpose spaces for another sector of the economy that has been resilient, life sciences, which generally pay higher rent than logistics tenants do.
Lambert said the firm is considering such a conversion for the San Diego building it is buying.
“Life sciences are blowing it out of the park right now,” Lambert said. “They’re looking for big, roomy spaces where they can house a lot of equipment, warehouses work for them.”
Whereas a warehouse tenant might pay $12 per square foot for the space, Lambert expects he could get $20 per square foot from a life-sciences user.
Lambert also sees interest in last-mile delivery space spreading beyond the country’s biggest cities to smaller urban centers whose popularity has only grown amid the pandemic as remote work has permitted employees to spread beyond space constrained and costly markets such as New York.
“I do believe in the coastal markets and Chicago, but there’s tremendous opportunities in other places too that haven’t received the same attention, cities like Salt Lake, and Denver, and Dallas, and Nashville. It’s a natural progression for last-mile spaces.”
Read more: Warehouse properties are suddenly red-hot, with Amazon snapping up space while ailing companies sell. Here’s a look at key deals and market forecasts that lay out a huge opportunity for industrial real-estate.