The founder of Spanish fashion chain Zara, one of the world's richest people, is making a serious bet on logistics in the United States, dropping $722M on five properties.

Amancio Ortega bought distribution centers in Tennessee, South Carolina, Virginia, Pennsylvania and Texas, from Realty Income Corp., Bloomberg reports. Ortega is making the investment with his family office, Pontegadea.

Pontegadea announced last week it acquired a 1M SF logistics center in Philadelphia, also from Realty Income, for $148M. It is unclear if that transaction is part of the larger portfolio sale.

Ortega, the richest man in Spain, has a 59% ownership stake of Inditex SA, which owns Zara and other brands. He is worth $44B, and his family office’s real estate investments in the past have largely focused on apartments and office towers, per Bloomberg.

The outlook for industrial space looks stronger than that of office buildings, with rents for warehouse and distribution space expected to jump 30% over the next five years, according to Cushman & Wakefield data from April. In the second quarter of 2022, average rents for the industrial asset class went above $8 per SF, up 21% year-over-year, according to a JLL report released in August.

There are some signs of softness in the sector, however. The U.S. construction pipeline is the highest it has ever been at roughly 586.7M SF, and the vast majority of that space is being built speculatively, according to JLL data previously reported by Bisnow.

Commercial real estate analytics firm Green Street has predicted American developers will likely build 90M SF more a year than will be leased by companies, decreasing occupancy a full point to 94% over the next three years. Some investors have elected to back away from the asset class as interest rates have soared.