David Ebbrell, from M7 Real Estate Ltd., climbed onto the roof of a warehouse in Germany to check its condition. His company has sent scouts to remote places across Europe and the UK. Ebbrell was in Korntal-Münchingen, outside Stuttgart, checking the roof of a battery storage building by walking across it. The old-school approach was necessary due to the building’s remote location.
Real estate investment firm M7 Real Estate Ltd. has been sending scouts to remote places across Europe and the UK in search of hidden gems in the industrial sector. In December 2014, David Ebbrell, a member of M7’s team, found himself in Korntal-Münchingen, a small town outside Stuttgart in Germany. His mission was to check the roof of a battery storage building, and he was doing it the old-fashioned way: by walking across it.
Ebbrell’s experience was just one of the many challenges that the team at M7 Real Estate has faced in their pursuit of industrial properties. However, the firm’s efforts have paid off as they have found a lucrative niche in the real estate market: urban warehouses.
As highlighted by Bloomberg, the rise of e-commerce has spurred the demand for urban warehouses, which are strategically located near major cities to enable faster delivery times. Wall Street giant Blackstone Group Inc. was one of the first to recognize the potential of these properties and made a massive bet on them. In 2010, the firm acquired a portfolio of 180 warehouses across the US for $1.1 billion.
Blackstone’s investment paid off handsomely as the demand for urban warehouses continued to grow. The firm sold the portfolio in 2015 for $5.9 billion, making a profit of over $4 billion in just five years. This success has inspired other investors to follow suit, and the market for urban warehouses has become increasingly competitive.
M7 Real Estate has also been taking advantage of the trend. The firm has acquired over 100 industrial properties across Europe, including warehouses, logistics centers, and manufacturing facilities. The company’s focus on smaller, overlooked properties in remote areas has allowed it to acquire assets at lower prices than its competitors.
However, M7’s success has not been without its challenges. The firm’s strategy of acquiring properties in remote areas has meant that they often need to be renovated or upgraded to meet the needs of modern tenants. This can be a costly and time-consuming process, and it requires a team of experts to manage the projects effectively.
Despite these challenges, M7 Real Estate’s portfolio has been performing well. The firm’s assets have a combined value of over €5 billion, and its investors have seen strong returns. M7’s CEO, Richard Croft, believes that the demand for industrial properties will continue to grow, and the firm is well-positioned to take advantage of this trend.
As e-commerce continues to reshape the retail industry, the demand for urban warehouses is expected to remain strong. Investors like Blackstone and M7 Real Estate have recognized the potential of these properties and have made significant bets on them. The competition for these assets is intense, but for those who can acquire and manage them effectively, the rewards can be substantial.
David Ebbrell’s experience checking the roof of a battery storage building in Germany may have been petrifying, but it is just one small example of the challenges that real estate investors face in the pursuit of profitable properties. The success of firms like M7 Real Estate and Blackstone Group Inc. demonstrates that with a combination of vision, expertise, and hard work, it is possible to find lucrative opportunities in the most unexpected places.
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