We’ve acquired a roughly 204,000 square foot distribution center with an in-place tenant in Jessup, Maryland, for roughly $35 million. The property is located about 45 minutes northeast of downtown Washington, DC, along the I-95 corridor, the main highway route along the East Coast.

As demand for more and faster delivery continues to grow, we believe that “last-mile” distribution facilities located close to major population centers will become increasingly important for retailers.

This acquisition was made by a joint venture between two Fundrise sponsored funds, the Fundrise Interval Fund, which invested roughly $7.0 million, and the East Coast eREIT, which invested roughly $28.0 million.

Strategy

Core Plus

Acquire and operate stabilized, cash flowing real estate

  • Risk-return profile: Moderate
  • Expected timing / delay of returns: Shortly after acquisition
  • Expected source of returns: Income with some growth

More about our strategies

Note that this section is intended to provide a general overview of the Core Plus strategy for educational purposes only, and is not meant to be representative of the specific details of any individual investment. All investments involve risk and there are no guarantees of any returns.

Business plan

Completed in 1990 and renovated in 2020, the building was designed as a last-mile distribution facility, allowing tenants to serve customers across the national capital region and benefitting from close proximity to the port of Baltimore.

A last-mile distribution center, also referred to as a terminal building or sorting center, acts as a handoff point to connect 18-wheeler trucks, which typically carry goods in bulk across longer distances, with the smaller vehicles that make the final leg of the journey to drop off packages at individual homes and businesses.

While it’s critical that these types of facilities are located close to major population centers and easily accessible to the major highways, the availability of industrial zoned land that meets this criteria (generally speaking) is in increasingly short supply, which we believe will help drive long-term value.

The property is fully leased to World Depot, Inc., a third party logistics provider (3PL) that offers shipping and supply chain coordination services for sellers on various e-commerce websites such as Amazon and Wayfair. As of our acquisition on June 4, they had five years remaining on their initial lease term with multiple options to extend. Our goal is to earn regular rental income from the property and then eventually sell it at a profit.

Why we invested

  • Prime location: The property is located centrally between Washington, DC, and Baltimore, located less than one mile from I-95, which serves as the primary highway link for the Mid-Atlantic region and provides direct access to the East Coast more broadly. From the site, delivery vehicles can reach most of the Baltimore-Washington area within a two-hour drive.
  • Income-generating asset: The property is fully leased to an in-place tenant, with five years remaining on their lease.
  • High-demand property type: Despite the continuing, fast growth of e-commerce delivery — a trend that was only accelerated by the COVID-19 pandemic — zoning restrictions have limited the amount of new supply of industrial, last-mile properties available. To our knowledge, over the past several years prior to our acquisition, there have been relatively few deliveries of properties of this type in the Baltimore-Washington corridor, and new supply under construction remains limited.

As always, if you have any questions or feedback, please visit our help center or reach out to us at investments@fundrise.com.