Item 2. Properties
ITEM 2. Properties
General
In addition to the information in this Item 2, certain information regarding our portfolio is contained in Schedule III (“Financial Statement Schedule”) under Part IV, Item 15(b) and which is included in Part II, Item 8.
Our Warehouse Portfolio
As of December 31, 2023, we operated a global network of 245 warehouses that contained approximately 1.5 billion cubic feet and over 5 million pallet positions. We believe that the volume of cubic feet in our warehouses and the number of pallets contained therein provide a more meaningful measure of our storage space than warehouse surface area expressed in square feet as customers generally contract for storage on a pallet-by-pallet basis, not on a square footage basis. Our warehouses feature customized racking systems that allow for the storage of products on pallets in horizontal rows across vertically stacked levels. Our racking systems can accommodate a wide array of different customer storage needs.
The following table provides summary information regarding the warehouses in our portfolio that we owned, leased or managed as of December 31, 2023.
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Country / Region # of
warehouses
Cubic feet
(in millions)
% of
total
cubic feet Pallet
positions
(in thousands) Average economic occupancy (1)
Average
physical
occupancy (1)
Revenues (2)
(in millions)
Segment
contribution
(NOI) (2)(3)
(in millions)
Total
customers (4)
Warehouse Segment Portfolio (5)
United States
East 53 376.8 25 % 1,176 85 % 72 % $ 635.6 $ 195.3 1,105
Southeast 49 317.4 21 % 980 83 % 75 % 458.0 103.9 697
Central 41 268.2 18 % 1,085 84 % 77 % 439.3 155.6 731
West 45 273.7 18 % 1,158 80 % 74 % 401.5 140.6 624
Canada 5 32.6 2 % 121 92 % 89 % 45.5 16.5 85
North America Total 193 1,268.7 86 % 4,520 83 % 75 % $ 1,979.9 $ 611.9 2,373
Netherlands 7 36.7 2 % 112 82 % 82 % 51.2 10.2 33
United Kingdom 6 40.1 3 % 244 89 % 84 % 53.8 22.6 187
Spain 4 15.2 1 % 77 61 % 61 % 21.5 5.3 275
Portugal 4 11.5 1 % 58 64 % 64 % 11.6 2.7 175
Ireland 3 9.5 1 % 59 79 % 70 % 20.4 4.9 144
Austria 1 4.2 — % 44 75 % 75 % 23.2 6.9 141
Poland 2 3.5 — % 14 95 % 95 % 6.3 1.4 62
Europe Total 27 120.7 8 % 608 80 % 77 % $ 188.0 $ 54.0 1,235
Australia 11 60.0 4 % 206 92 % 84 % 171.6 39.0 128
New Zealand 7 20.4 1 % 86 97 % 88 % 38.9 13.9 62
Asia-Pacific Total 18 80.4 5 % 292 94 % 85 % $ 210.5 $ 52.9 186
Argentina 2 9.7 1 % 23 81 % 81 % 12.7 3.8 51
South America Total 2 9.7 1 % 23 81 % 81 % $ 12.7 $ 3.8 51
Warehouse Segment Total / Average 240 1,479.5 100 % 5,443 83 % 76 % $ 2,391.1 $ 722.6 3,826
Third-Party Managed Portfolio
United States 3 14.9 74 % — — — $ 16.1 $ 0.6 3
Canada 1 5.3 26 % — — — 3.7 0.8 1
North America Total / Average 4 20.2 100 % — — — $ 19.8 $ 1.4 4
Asia-Pacific 1 — — % — — — 22.8 4.5 1
Third-Party Managed Total / Average 5 20.2 100 % — — — $ 42.6 $ 5.9 5
Portfolio Total / Average 245 1,499.7 100 % 5,443 83 % 76 % $ 2,433.7 $ 728.5 3,826
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(1) We define average economic occupancy as the aggregate number of physically occupied pallets and any additional pallets otherwise contractually committed for a given period, without duplication. We estimate the number of contractually committed pallet positions by taking into account actual pallet commitments specified in each customer’s contract, and subtracting the physical pallet positions.
We define average physical occupancy as the average number of occupied pallets divided by the estimated number of average physical pallet positions in our warehouses for the year ended December 31, 2023. We estimate the number of physical pallet positions by taking into account actual racked space and by estimating unracked space on an as-if racked basis. We base this estimate on the total cubic feet of each room within the warehouse that is unracked divided by the volume of an assumed rack space that is consistent with the characteristics of the relevant warehouse. On a warehouse by warehouse basis, rack space generally ranges from three to four feet depending upon the type of facility and the nature of the customer goods stored therein. The number of our pallet positions is reviewed and updated quarterly, taking into account changes in racking configurations and room utilization.
(2) Year ended December 31, 2023.
(3) We use the term “segment contribution NOI” to mean a segment’s revenues less its cost of operations (excluding any depreciation and amortization, impairment charges and corporate-level selling, general and administrative expenses). The applicable segment contribution NOI from our owned and leased warehouses and our third-party managed warehouses is included in our warehouse segment contribution NOI and third-party managed segment contribution NOI, respectively.
(4) We serve some of our customers in multiple geographic regions and in multiple facilities within geographic regions. As a result, the total number of customers that we serve is less than the total number of customers reflected in the table above that we serve in each geographic region.
(5) As of December 31, 2023, we owned 157 of our North American warehouses and 40 of our international warehouses, and we leased 36 of our North American warehouses and seven of our international warehouses. As of December 31, 2023, fourteen of our owned facilities were located on land that we lease pursuant to long-term ground leases.
We own, develop and manage multiple types of temperature-controlled warehouses, which allows us to service our customers’ needs across our network. Our warehouse portfolio consists of five distinct property types:
• Distribution . As of December 31, 2023, we owned or leased 94 distribution centers with approximately 687.0 million cubic feet of temperature-controlled capacity and 2.2 million pallet positions. Distribution centers typically house a wide variety of customers’ finished products until future shipment to end users. Each distribution center is located in a key distribution hub that services a distinct surrounding population center in a major market.
• Public . As of December 31, 2023, we owned or leased 84 public warehouses with approximately 420.9 million cubic feet of temperature-controlled capacity and 1.7 million pallet positions. Public warehouses generally store multiple types of inventory and cater to small and medium-sized businesses by primarily serving the needs of local and regional customers.
• Production Advantaged . As of December 31, 2023, we owned or leased 58 production advantaged warehouses with approximately 349.5 million cubic feet of temperature-controlled capacity and 1.5 million pallet positions. Production advantaged warehouses are temperature-controlled warehouses that are typically dedicated to one or a small number of customers. Production advantaged warehouses are generally located adjacent to or otherwise in close proximity to customer processing or production facilities and were often build-to-suit at the time of their construction.
• Facility Leased . As of December 31, 2023, we had 4 facility leased warehouses with approximately 22.1 million cubic feet of temperature-controlled capacity. We charge our customers that are party to these leases rent based on the square footage leased in our warehouses. Our facility leased warehouses are facilities that are leased to third parties, such as retailers, e-tailers, distributors, transportation companies and food producers, that desire to manage their own temperature-controlled warehousing or carry on processing operations generally in warehouses adjacent, or in close proximity, to their retail stores or production facilities. The majority of our facility leased warehouses are leased to third parties under “triple net lease” arrangements.
• Third-Party Managed . As of December 31, 2023, we managed 5 warehouses on behalf of third parties with approximately 20.2 million cubic feet of temperature-controlled capacity. We manage warehouses on behalf of third parties and provide warehouse management services to several leading food retailers and manufacturers in customer-owned facilities, including some of our largest and longest-standing customers. Our third-party managed segment provides a complete outsourcing solution by managing all
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aspects of the distribution of our customers’ products, including order management, reverse logistics, inventory control and, in some instances, dedicated transportation services for temperature-controlled and ambient ( i.e. , non-refrigerated) customers.