Warehousing & Logistics

$1.6 Billion in New Private Equity to Fund More Lineage Logistics Growth

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Lineage Logistics announced on September that it has raised $1.6 billion in equity from new and existing strategic partners. Participating investors include Oxford Properties Group, BentallGreenOak, D1 Capital Partners, Cohen & Steers, OPTrust, CenterSquare Investment Management, and investment funds managed by Morgan Stanley Tactical Value, among others.

“This significant investment – from both new and existing investors – is validation of our business model, our innovative strategy and our plans to continue expanding our footprint as the world’s largest temperature-controlled warehousing and logistics company,” said Greg Lehmkuhl, president and chief executive officer of Lineage. “As we reimagine the food supply chain and execute on our company purpose to eliminate waste and help feed the world, we remain focused on driving value for our more than 5,000 customers by operating globally and deploying industry-changing technologies to create efficiencies across our 320 facilities.”

Lineage Logistics President and CEO Greg Lehmkuhl

During 2020, Lineage made 16 acquisitions and executed on 15 new expansions and greenfield facilities. The company also continues to develop a number of the world’s most advanced fully automated warehouses that will reduce environmental intensity, while providing flexible and expansive capacity for customers during a period where the novel coronavirus (SARS-CoV-2) pandemic is putting acute strain on the global food supply chain. New capital will fuel these increasingly large investments.

“Since the company’s founding in 2008, we have been on a mission to transform the food chain by building a global platform, fueling it with advanced technologies and putting in place a world-class leadership team to lead this industry,” said Adam Forste, co-executive chairman of Lineage and co-founder and managing partner at San Francisco, California-headquartered Bay Grove Capital, which founded and manages Lineage Logistics. “From the acquisition of our first warehouse, we have been able to build Lineage by having great investors – this capital raise adds an incredible group of new strategic partners and board participants that will further accelerate our ability to grow and innovate.”

In conjunction with the new equity infusion, Oxford Properties President Michael Turner will join Lineage’s board of directors, bringing with him decades of commercial real estate experience. Oxford is a leading global investor, developer and manager of commercial real estate with approximately $60 billion in assets under management. Operating across four continents, its portfolio spans over 100 million square feet of space across both global gateway cities and high-growth hubs where it invests in properties, portfolios, development sites, debt, securities and platforms across the risk-reward spectrum.

“Over recent years, Oxford has substantially increased our exposure to logistics real estate by selectively investing in a series of best-in-class operators across the globe, and Lineage represents the premier operator in the cold storage sector,” said Turner. “I look forward to working with the Lineage management team and the rest of the board, which has transformed the company into the global market leader. Our investment demonstrates confidence in the team, the platform it has built and Lineage’s growth opportunities.”

The company also announced new board observers, each with extensive real estate investment experience, including John Carrafiell, a founder and senior managing partner of real estate investment management and advisory firm BentallGreenOak, and Zhang Xin, chief executive officer of SOHO China, one of the PRC’s largest commercial property developers.

Expansion of Cold Storage Warehouse Capacity in UK

Meanwhile, on September 10 Lineage announced significant expansion plans in the United Kingdom at its Peterborough Superhub in the South East just 70 miles from Central London and at its Northern Superhub in Heywood near Manchester.

The company broke ground on a 92,000-pallet-position, fully automated expansion at its Peterborough location to form a strategically positioned South Eastern Superhub, which will serve both retail and foodservice clients. This 35-meter tall expansion will feature state-of-the-art refrigeration technology, helping to reduce energy consumption and overall environmental impact.

This new capacity will complement 26,000 existing conventional pallet positions at the property, which combined with the expansion’s automated design will enable maximum flexibility and highly customized solutions for customers. The major investment brings Lineage’s total automated warehouse count in Britain to six, with a total of 330,000 automated pallet positions.

“Our South Eastern Superhub is extremely well situated and in close proximity to major motorways that are key to the UK’s supply chain, strengthening our ability to efficiently connect customers with major food markets and population centers,” said Mike McClendon, Lineage’s president of international operations and executive vice president of network optimization. “We are also thrilled to offer a combination of automation and conventional racking upon completion, which will allow us to meet the diverse needs of both retail and foodservice sectors while also delivering energy efficient and cost-effective solutions for customers.”

Lineage’s phased expansion approach in Peterborough is in response to growing customer demand from both online and conventional grocery sales – a trend that has accelerated as a result of the Covid-19 pandemic. In the UK, online sales now account for 13% of all grocery sales, up from 7.4% in March of 2020, and new online customers are expected to continue shopping online. Frozen items have also increased in popularity, and the sector is up 22% year over year.

In addition to Lineage’s expansion in Peterborough, the final phase of the company’s expansion plans in Heywood will be fully operational in March of 2021 and add 22,000 pallet positions at the existing location.

“Our large expansions in these two critical logistics hubs highlight commitment to adapting to customers demands as consumer expectations shift in the UK and around the globe,” said President and Chief Executive Officer Greg Lehmkuhl. “We are, and have always been, 100% focused on our customers and their extended supply chains, and we are pleased to make these significant investments, create more than 230 much-needed jobs and provide expanded access to our next-generation cold storage network.”