How Amazon, Walmart deliver packages to you in time for Christmas
Online retailers, including Amazon and Walmart, are adding more fulfillment centers to meet consumer demands for faster shipping times, a top priority during the holiday season.
Sterling Construction Co. (Nasdaq: STRL) is buying Plateau Excavation Inc. for $400 million. Plateau serves customers in the e-commerce and warehousing sectors with infrastructure and excavating contracting services.
Plateau’s recent and current construction projects include: an Amazon.com Inc. (Nasdaq: AMZN) fulfillment center in Alabama, a Walmart Inc. (NYSE: WMT) distribution center in Florida and a UPS (NYSE: UPS) warehouse at the Charlie Brown airport in Atlanta.
“The rapid growth in e-commerce, cloud computing and the continuing rise of internet activities makes Plateau, a company that specializes in data center and warehouse construction, a very attractive addition to Sterling’s portfolio of businesses,” says Sterling CEO Joe Cutillo. “This type of construction commands higher margins than our heavy highway space and enables us to grow alongside an impressive end-customer base, including many of the largest and most respected e-commerce, social media and logistics providers, and big-box enterprises.”
More local fulfillment centers means faster delivery times and lower last-mile costs to both retailers and customers. Last-mile is the last leg of the delivery process where products reach their final destinations.
“Plateau is a transformational acquisition in that it not only complements our core heavy civil construction and commercial concrete businesses, but also gives Sterling access to new geographies and rapidly growing end markets,” Cutillo adds.
Existing logistics sites are attracting buyer attention too. Stockbridge Capital Group has acquired 26 e-commerce and logistics properties from Westcore Properties.
“We’re excited about this portfolio because the properties are located in markets with above-average population growth, a propensity toward e-commerce buying and selling, lower overall vacancy rates and higher overall rent growth,” says Nicole Stagnaro, head of opportunistic and platform transactions at Stockbridge.
In 2018, logistics and transportation services provider Ryder System Inc. (NYSE: R) acquired fulfillment company MXD Group for about $120 million. Ryder made the deal to keep up with rising online sales.
The MXD purchase included 109 fulfillment facilities and a network of 72 third-party facilities.
Dealmakers point out that e-commerce real estate properties are worth taking a looking at. “It is no secret that e-commerce continues to enhance the attractiveness of high-quality and well-located warehouse and distribution properties,’’ notes Stagnaro.