UPS Offloads Offices, Warehouses To Fortress For $368M
United Parcel Service sealed a package deal to sell more than 1M SF of office and industrial properties across the country for $368M.
The Atlanta-based shipping giant agreed to sell four buildings in Georgia, Illinois and California to investment giant Fortress Investment Group, CoStar reported.
UPS plans to lease back the 310K SF office building at 12380 Morris Road in Alpharetta, Georgia. That building sold for $93M, the Atlanta Business Chronicle reported.
The remaining properties are an 85K SF warehouse in Inglewood, California, a 765K SF distribution center in Jurupa Valley, California, and a 230K SF distribution center in Bensenville, Illinois.
Neither UPS nor New York-based Fortress, led by co-CEOs Joshua Pack and Drew McKnight, responded to Bisnow's request for comment.
The portfolio sale is part of UPS' effort to cut costs by $3.5B this year, taking on the largest network reconfiguration in the company's history.
The shipping service announced its savings plan in April, with plans to cut 20,000 jobs and close down more than 70 facilities. The change came as UPS' Amazon business is estimated to shrink by 50% by mid-2026, Business Insider reported.
On a second-quarter earnings call in July, UPS Chief Financial Officer Brian Dykes said the company has already closed 155 operations, including 74 buildings. The company is on track to hit its expense reduction goal of more than $3B, he added.
The company plans to close more buildings through the second half of the year, UPS CEO Carol Tomé said on the call.
“Changes in trade policies are impacting global trade and demand,” Tomé said on the July call. “It will likely all settle down at some point, but for now, it is a very volatile environment. But we're not letting this knock us off our strategic plan. At UPS, we are proactively taking action to put our company on a much stronger footing and position our company well for the future.”
Sale-leasebacks are driving a surge in activity in the net lease real estate sector. Transactions of net-leased buildings are up 37% over the past year, according to data from CBRE and MSCI.
