A joint venture that includes the industrial real estate arm of financial titan Goldman Sachs Asset Management said today it will develop a three-story warehouse and distribution center in Brooklyn, New York that will be the first multilevel industrial facility on the East Coast.
The 370,000-square-foot building will be located at 640 Columbia Street in the borough's Red Hook waterfront district. Under the joint venture, the property will be developed by New York-based DH Property Holdings, with the Goldman Sachs Asset Management unit providing the equity investment. JLL Inc., the Chicago-based real estate and logistics services giant, will market and lease the property.
The development will include 130-foot truck courts that can accommodate full-size tractor trailers on the ground and second levels. The facilities ceilings will be 28 feet high, and will include 33 loading doors and an attached parking deck, according to the Goldman unit. The announcement did not disclose project cost, or when it will be completed.
The facility's design is expected to become more commonplace in densely populated urban areas where land is scarce and expensive, and where strong demand exists for last-mile fulfillment services for goods ordered online. New York City has three problems in this regard: Available land is extremely tight, rents are sky-high, and its industrial market is underserved because much of the needed space is functionally obsolete.
"New York City has the highest population and greatest density of any city in the U.S., but has a severely undersupplied warehouse market," said Dov Hertz, founder of DH Property Holdings. "640 Columbia will offer tenants a product that does not currently exist in the market, and the location provides companies with immediate access to their end consumers." Robert Kossar, JLL's international director and industrial specialist, added that "this site offers a unique ability to penetrate a last-mile market with significant scale, something companies were previously unable to do."
The project is perhaps the most visible so far that the Goldman Sachs Asset Management unit has invested in. The unit, formally known as "Goldman Sachs Asset Management Private Real Estate," has invested in 2.6 million square feet of industrial real estate in the past 18 months. All told, the unit controlled $1.9 billion of real estate assets as of last Sept. 30.