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Lineage Logistics raises $700M in equity financing

Real estate investment trust Lineage Logistics, which specializes in cold storage logistics, said Tuesday it has raised $700 million in equity from new and existing investors, an indication that a good business in a fast-growing segment can raise big money even in a difficult interest rate environment.

The capital raise brings to $2.4 billion in funds that privately held Lineage has raised in 2022, a year that has seen the Federal Reserve hike rates at an unprecedented clip. Lineage has raised $6.7 billion in equity capital since January 2020.

The new capital will support a $1.25 billion build-out of 20 new and expansion projects, as well as the creation of two fully automated U.S. superhubs, Lineage said. One of the hubs, in Hazelton, Pennsylvania, is under construction. The other hub project, which will be in the Southern California market, has yet to be announced. Lineage currently operates one superhub, which is located in Peterborough, U.K.

The funds will also be used to increase Lineage’s investment in solar capacity. Lineage plans to increase its on-site solar installations by 50% during 2023, said Adam Forste, co-founder and managing partner at Bay Grove, an investment firm that founded Lineage and still manages it. Forste is also Lineage’s co-executive chairman.

The total expansion will add about 700,000 pallet positions to Lineage’s existing infrastructure, which translates to a 7% increase in global capacity, the Novi, Michigan-based company said. 

Lineage did not identify any of the investors.

Lineage operates out of 400 facilities in 20 countries, with more than 2 billion cubic feet under management. It has capitalized on the growing demand for temperature-controlled warehouse space over the past decade, and in particular in the wake of the COVID-19 pandemic.

In addition, cold storage capacity has not kept up with demand, in part because running such facilities are complex and expensive propositions compared with locations that only store dry goods for fulfillment and distribution.