Tag Archive for: industrial distribution centers

Aerial photograph of forest and golf course with lake

The pandemic-driven surge in demand for e-commerce has attracted warehouse developers to an unlikely business prospect: turning old golf courses intoĀ distribution centers.

Since the mid-2000s, golf has been suffering from fewer players and more course closures. The pandemic has giving the sport a boost because it offers both outdoor entertainment and social distancing. But as other leisure activities resume, many expect the sportā€™s headwinds to pick up again.

Thatā€™s caught the attention of investors seeking to cash in on the warehouse boom. In New York, Tennessee, Pennsylvania and other states,warehouses are rising on parcels of land formerly occupied by golf courses. And among the tenants developers have drawn to these sites areĀ AmazonĀ andĀ UPS.

Online shopping during the pandemic has made warehouses one of the hottest corners of commercial real estate. The industrial market had itsĀ strongest yearĀ on record in 2020, and big money managers likeĀ Blackstone,Ā CerberusĀ andĀ KKRĀ have allĀ snapped upĀ logistics centers since last March.

ā€œFinally our asset class is the most popular in the world,ā€ saysĀ Jack Fraker, head of industrial investments for CBRE.

Still, converting a golf course to a warehouse is no chip shot. Developers often have to contend with the rezoning process and the ire of nearby residents who oppose the increased traffic and noise.

But it can be tough for local leaders to say no when Amazon offers millions in investment and hundreds of jobs. In May, Onondaga County in New York announced the e-commerce giant would build a $350 million, 3.8-million-square-foot distribution center on land formerly occupied by a golf course in the town of Clay.

ā€œWith golf youā€™re just limited to the income of the ongoing business concern,ā€ saysĀ Keith Cubba, national director of Colliersā€™ Golf Course Advisory Services. ā€œThereā€™s going to be a much higher yield on 200 acres of residential or commercial.ā€


Source: Bloomberg