Chinese textile company Loftex Logistics has acquired a new 53,000-square-foot warehouse in New Jersey to use as its first fulfillment and distribution center in the U.S..
The company, which manufactures and exports home textile goods, paid approximately $12.5 million for the warehouse in Carlstadt, about 15 miles west of New York, according to real estate research company CoStar.
The sale was announced at the end of February and the newly constructed warehouse was owned by Sitex Group, a New York private equity firm that specializes in real estate investment.
"The space and its location were so desirable that Loftex Logistics, LLC went under contract on the property before construction even started," said Tom Vetter, senior vice-president of NAI Hanson, which represented Sitex in the sale.
"We will continue to see quick absorption of new, quality industrial assets within the Meadowlands sub-market due to very little land available for development, its close proximity to New York City and the emergence of e-commerce," he said in a statement.
Vetter told China Daily that even though he hasn't yet seen an apparent increase in the number of Chinese companies looking for warehouse space in New Jersey, it was the second deal he has closed for a Chinese company.
The other company, which he declined to disclose, is also a textile company looking for convenient warehouse space.
"They were also looking to set up a distribution facility — just because of the proximity to New York and the highways that are in this part of New Jersey. That was what was desirable for them, and I think it's the same thing for Loftex," he said.
Loftex supplies companies with high-end home towels. The Shandong-based company is one of the largest towel manufacturers and exporters in the world.
With the growth of e-commerce, many companies are looking to New Jersey for warehouse space, according to NorthJersey.com. Vacancy rates in New Jersey are at their lowest in nearly two decades, according to Cushman & Wakefield.
The purchase also comes at a time when many Chinese companies are expanding into the United States with manufacturing and logistics chains, or simply investing in American property.
Last November, China Life Insurance Co. invested more than $1 billion into U.S. warehouses, taking a 30 percent stake in warehouse operations acquired by Global Logistic Properties, a warehouse-owner based in Singapore.
"I think there is activity on the part of Chinese companies to acquire real estate for their own occupancy and usage, which shouldn't be terribly surprising given there seems to be a pretty strong push on the part of the Chinese in general, looking to invest in the U.S. because of what's going on in Asia and because of the safe-haven status of the U.S.," said Scott Latham, vice-chairman of Jones Lang LaSalle Capital Markets.
