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EXCLUSIVE: Shopify To Open First U.S. Distribution Center In Georgia

A Canadian e-commerce company experiencing a meteoric rise has made a significant first push into U.S. commercial real estate.

A rendering of The Cubes prototype distribution facility CRG is developing all over Georgia.

Shopify, which operates e-commerce platforms for independent retailers, has signed a lease for a 563K SF under-construction distribution facility in Newnan, Georgia, sources familiar with the deal tell Bisnow.

Shopify's lease is with developer CRG at its The Cubes at Bridgeport industrial park, and it marks the first distribution hub leased by Shopify in the U.S., the sources said.

Shopify's building is the second at the project after CRG built a 1M SF distribution center that was ultimately leased by Amazon and sold to KKR. CRG, a division of Clayco, broke ground on what will become Shopify's building in February and expects to deliver it in October.

Officials with Shopify didn't respond to requests for comment. CRG Executive Vice President Mike Demperio, who is leading The Cubes project, declined to comment. Eric Van Hofwegen, a broker with the Canadian real estate firm Royal LePage who represents Shopify, declined to comment.

The deal comes two years after Shopify announced plans to offer fulfillment services for its merchants and customers in what market watchers saw as a bid to rival Amazon. Shopify Chief Product Officer Craig Miller said in 2019 that Shopify planned to spend $1B to own and operate its own U.S. fulfillment network, but it launched its Shopify Fulfillment Network with "logistics providers" operating in six states, including Georgia, The Wall Street Journal reported.

“Shopify continued to build the foundation of Shopify Fulfillment Network, introducing features to help merchants manage the products fulfilled on our network, improve shipping speed and accuracy, and manage preferences, like staff notifications,” the company stated in a second-quarter earnings release.

The e-commerce platform purchased the warehouse software and autonomous robot maker 6 River Systems Inc. in 2019 for $450M in preparation for its move into physical distribution, the WSJ reported.

“Shopify is building the essential infrastructure for this increasingly digital world to allow as many people as possible to participate,” Shopify CEO Tobi Lütke said during Shopify Unite's June developer conference, according to a second-quarter earnings press release.

Shopify's net income shot up from $36M to $879M year-over-year as of the second quarter, with total revenues exceeding $1.1B, a more than 50% increase. Shopify now operates the second-largest e-commerce platform in the U.S., with more than a million customers and conducting 8.6% of all U.S. e-commerce sales, PaymentDive reported in April.

During an April earnings call, Shopify President Harvey Finkelstein said the Shopify Fulfillment Network was targeting merchants who ship anywhere from 10 to 10,000 orders a day.

“We really are narrowing down exactly who is the right customer for SFN because we want to have the best ... experience possible,” Finklestein said on the call.

The Cubes at Bridgeport is just one of the spec industrial project CRG is embarking on around Georgia. It plans to break ground in the next two months on a 1M SF building in Jackson, Georgia, dubbed The Cubes at River Park.