Demand for space to store, distribute and manufacture goods continues to outstrip supply, and KKR has turned to building warehouses after being a big buyer of the properties.
The real estate unit of the private equity giant has started ground-up industrial developments in Atlanta, Dallas, Denver, and Florida. KKR's current 45 million- square-foot industrial portfolio will be increased by 180,000 square feet with the addition of the midsized warehouses for last-mile deliveries.
Amazon.com Inc., the main driver of the e-commerce boom, said last month that it had overbuilt its logistics network, cutting into the company's productivity and profits. Despite supply-chain disruptions, KKR and other industry players still see a need for warehouses.
Ben Brudney, who oversees KKR's industrial real estate investments in the U.S., said that they continue to see strong demand for high-quality industrial space.
Funding for the projects will come from the KKR Real Estate Partners Americas III fund and a $200 million construction loan. KKR agreed to acquire $7 billion of industrial properties before the latest effort.
In the first three months of the year, the US warehouse vacancy rate fell for a sixth straight quarter to 3.4%, even as 90 million square feet of new space were completed. Industrial-property sales in the first quarter totaled $33.9 billion, and prices jumped 30% from a year earlier to a record high.