GSA and Cushman market seven warehouses bought for ICE detention centers

Green Street News reported Tuesday that Cushman & Wakefield, working with the U.S. General Services Administration, has been tapped to find buyers for seven vacant warehouses spanning 5.3 million square feet. The assignment unwinds part of this year's federal detention-center buying push at a price below what the government paid, with bids starting at $114 per square foot, or about $600 million for the portfolio. That opening bid sits about 15 percent below the $134 per square foot the government paid for the seven sites earlier this year, a $706.8 million total, and below the $138 national average industrial asking rate CommercialCafe reported for September.

The buildings are scattered across five states: 6020 West 300 South in Salt Lake City, 1365 East Hightower Trail in Social Circle, Ga., the Eastwind Logistics Center in Socorro, Texas, 50 Rausch Creek Road in Tremont, Pa., 6505 Atlanta Highway in Flowery Branch, Ga., and 7525 Cogswell Street in Romulus, Mich.

The Ritner Logistics Center at 3501 Mountain Road in Upper Bern, Pa., shows how fast the basis moved: ICE bought the property from PCCP in February for $87.4 million, or $169 per square foot, at a point when the Department of Homeland Security planned to hold 1,500 immigrants there. A $114 opening bid sits just under a third below that basis, and PCCP brought a $5 billion fund to market in September, months after that exit.

The conversions were scrapped amid local political opposition, so the warehouses remain vacant; plans for detention centers modeled after Alligator Alcatraz, Louisiana Lockup, Cornhusker Clink and Speedway Slammer did not survive. During the same January and February buying blitz, ICE also purchased 11 warehouses for about $1 billion, and GSA had helped arrange those acquisitions around a narrow specification: secure entryway systems, interlocking doors, and a location within 10 miles of the nearest Enforcement and Removal Operations facility.

That specification is what a buyer now has to underwrite around, because a security build-out designed for federal custody is not obviously the layout a third-party logistics tenant wants; the government's 15 percent concession is best read as an estimate of the cost of undoing the intended use, an inference the coverage does not confirm. The seller is plainly bidding to clear rather than holding out for the top of the market.

The assignment puts Cushman's industrial desk on the supply side of a market it has spent the year measuring from the demand side; its data underpinned PWD's September report on robotaxi operators leasing nearly 1 million square feet this year. When bids close and whether GSA would accept less than the $600 million floor have not been disclosed.