A commercial real estate company in Port Washington has formed a partnership with an out-of-state investor to buy up to $1 billion in offices, factories and warehouses — some of them on Long Island, executives said.
BEB Capital established "a programmatic joint venture" in the past three months with Rockpoint Group, a private equity firm in Boston that invests in real estate, they said.
The joint venture seeks to capitalized on increased demand for warehouses by Amazon and other online retailers. The companies want to increase their ability to make last-mile deliveries to consumers, said Lee J. Brodsky, CEO of BEB.
"The U.S. industrial and last-mile logistics sector continues to be red-hot," he said. "And with the growth of e-commerce accelerating during the pandemic, we expect there to be continued strong demand in this asset class."
Brodsky said online retailers need 1.25 million square feet of space for every $1 billion in sales, on average, or three times the space that’s needed by brick-and-mortar retailers. He predicted online retailers will require an additional 250 million square feet of space in the United States in the next five years.
Rockpoint executives, through a spokesman, declined to comment on Wednesday.
The joint venture has already acquired nearly 660,000 square feet of space, 32% of it in two buildings in Suffolk County.
The companies paid $24 million for 100 Marcus Blvd. in Hauppauge, records show. The 150,000-square-foot building is home to drugmaker Contract Pharmacal Corp., utility construction company Elecnor Hawkeye and Worldwide Retail Solutions, a provider of store fixtures, shelves and displays.
"With the growth of last-mile distribution centers, demand for industrial space on Long Island is at an all-time high," BEB chief operating officer Keyvan Ghaytanchi said in August when the Marcus Boulevard purchase was announced. "We have capital available and are looking to deploy it."
Separately, the joint venture paid $9 million for a 62,000-square-foot building at 44 Ramsey Rd. in Shirley, which is home to rubber sealing-products manufacturer Frank Lowe, according to records. Frank Lowe constructed the facility in 2008.
Brodsky said BEB and Rockport are contributing investment dollars to the joint venture. BEB is also "originating investments that build on [its] experience and relationships in the region and with a focus on industrial assets," he told Newsday.
BEB owns more than 2 million square feet of space along the East Coast, including offices, warehouses, factories and housing. The company was founded in 2013 by Brodsky’s father, Bert, who began buying commercial property in the 1980s.
Rockpoint has participated in 460 deals as of Sept. 30 with a total value of $69 billion. Locally, the Massachusetts-based firm invested in the Fountains at Lake Success, a 670,000-square-foot office complex near the North Shore-Long Island Jewish Medical Center.