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Lineage Logistics snags another $1.7 billion in equity investment

Temperature-controlled logistics REIT totes up $6 billion in equity raises in past 2 years

Another $1.7 billion in equity for Lineage (Photo: Jim Allen/FreightWaves)

Lineage Logistics LLC, a logistics warehouse real estate investment trust (REIT), said Tuesday that it has raised $1.7 billion in equity from various investors, bringing to $6 billion the total equity that the Novi, Michigan-based company has raised in the past two years.

Lineage, the world’s largest cold storage industrial REIT with more than 2 billion cubic feet of capacity in 19 countries, said in a statement that it will use the proceeds to strengthen its balance sheet and fund new construction and IT projects. Lineage executives declined any further comment.

The announcement marks Lineage’s second equity raise in 10 months. The privately held company raised $1.9 billion last March.

The statement listed 12 investors, including pension funds, mutual funds and private equity firms. Lineage was founded in 2008 by private equity firm Bay Grove, which still runs the company.

Lineage controls about 26% of the U.S. market for cold storage capacity and about 7.8% of the global market, according to data from Americold Realty Trust (NYSE: COLD), which happens to be Lineage’s closest rival.

Lineage has ridden the wave of a massive surge in online grocery sales sparked by changes in consumer behavior due to the COVID-19 pandemic and by a growing demand for quick, convenient home deliveries of foodstuffs. E-commerce is expected to account for more than 20% of total U.S. grocery sales by 2026, up from 3.4% in 2019, according to a joint report released in October by online grocery specialist Mercatus and market research firm Incisiv. 

In 2021, online sales are expected to account for 9.5% of total U.S. grocery sales, according to the forecast. Before the pandemic, those levels were not expected to be reached until the end of 2023 or the beginning of 2024.

Logistics warehouse demand in general is set to remain very elevated for years as more consumer buying activity moves online and more facilities are needed to store inventory.

Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.