Link Logistics Real Estate, formed less than three years ago by financial titan Blackstone Inc. (NYSE:BX) to focus on last-mile logistics real estate, reported on Tuesday its best quarter ever, signing more than 550 new and renewal leases for a record 23 million square feet and boosting its development pipeline by $1.6 billion over second-quarter totals.
In a third-quarter update, New York-based Link said it invested $5.6 billion during the period to support a pipeline of 30 million square feet. By quarter’s end, Link Logistics had expanded its portfolio to 440 million square feet, the company said.
During the quarter, Link began constructing 1 million square feet of projects at an estimated cost of $180 million.
In a sign of one of the strongest pricing environments in the history of logistics real estate, the company’s “leasing spreads,” the difference between rents on a new lease compared to what was paid before, rose a record 21%, it said.
As with other logistics real estate developers, Link is benefiting from a historic 10-year bull market in U.S. logistics real estate that began with the launch of the e-commerce revolution that accelerated demand for warehouse property to support last-mile fulfillment and deliveries. The market surged anew after the COVID-19 pandemic triggered even greater demand for logistics property, especially in areas close to densely populated consumer end markets.
Even after the pandemic recedes, secular e-commerce growth will combine with some level of inventory near-shoring to extend the bull market for the rest of the decade, according to a recent projection by Prologis Inc. (NYSE: PLD), the world’s largest developer, owner and operator of logistics real estate. Link operates exclusively in the U.S., while Prologis operates on multiple continents.
San Francisco-based Prologis operates 612 million square feet in the U.S. The two companies combined operate 1.052 billion square feet in the domestic market.