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In today's edition, we're diving deep into CBRE's ambitious logistics investment strategy, examining how the world's largest commercial real estate services firm is positioning itself to capitalize on a transformative shift in the warehousing sector.

Our breakdown will reveal how CBRE plans to leverage market dislocations and technological advancements to generate superior returns in the logistics space.

First, we'll explore CBRE's integrated platform and how their position as the world's largest commercial real estate services firm enables their specialized logistics strategy targeting modern warehouse development and acquisition.

Then, we'll analyze their pitch to RISIC, which demonstrates how the obsolescence of current U.S. logistics stock presents a unique opportunity in next-generation facilities.

Finally, we'll explain why the pitch worked so well to position CBRE at the intersection of e-commerce growth, technological advancement, and supply chain transformation.

Context and Market Environment

The logistics sector at large is experiencing a transformative convergence of technological disruption and market dislocation.

With a projected total addressable market of $166 billion by 2030 and 6.2% CAGR1, three fundamental forces are reshaping the landscape:

• E-commerce penetration is advancing steadily toward 34.8% of retail sales by Q2 20351, necessitating increasingly sophisticated fulfillment infrastructure. This structural evolution demands a complete reimagining of warehouse capabilities.

• Today's warehouses are a far cry from the basic storage boxes of the past. Think seamless concrete slabs designed for robots to glide across, sophisticated automated pallet systems that move inventory with precision, and management systems that would make a tech startup envious.

• Legacy facilities – which make up a staggering 72% of U.S. warehouse stock – simply weren't built for this new reality.

In short: Nearly three-quarters of America's warehouses are becoming obsolete in the face of modern requirements.

The timing couldn't be better for CBRE's strategy.

Market jitters have pushed transaction volumes back to 2017 levels, with prime assets now trading at a 25-35% discount from their peak.

But despite these bargain prices, the fundamentals remain rock-solid. Major markets are posting vacancy rates between just 2% and 8% – a clear signal that quality space remains scarce.

This perfect storm of discounted prices and persistent demand creates a rare arbitrage opportunity in institutional real estate.

CBRE's "Logistics 2.0" thesis positions warehouses as critical infrastructure nodes, integrating advanced power systems, sophisticated automation capabilities, and comprehensive sustainability features.

For institutional investors, the strategic focus has evolved beyond simple sector allocation to emphasize technological capability and product quality.

These modern logistics facilities now represent essential infrastructure underpinning the digital economy.

The context is established – now let's examine how CBRE's pitch articulates their unique approach to capturing this opportunity.

Breaking New Ground: Constructing The Perfect Pitch

CBRE's decision to open their deck with a global presence slide represents a sophisticated exercise in institutional positioning. This careful orchestration sets multiple psychological anchors that influence how the entire investment thesis is received.

The immediate presentation of CBRE's scale – $148.3B AUM, 130,000+ employees, and operations across more than 100 countries – establishes deep institutional credibility before any strategic discussion begins.

This creates a foundation of assumed capability and sophistication that shapes how the audience processes subsequent information.

The emphasis on scale transcends mere statistics, suggesting a depth of resources and operational expertise that resonates particularly well with institutional allocators.

The organizational structure diagram performs dual functions beyond illustrating corporate architecture – by positioning CBRE Investment Management within a broader ecosystem of Advisory Services and Global Workplace Solutions, the slide addresses a critical institutional investor consideration:

Information advantage.

The visual integration of research, services, and investment management implies sophisticated market intelligence networks – a decisive advantage in logistics real estate where granular market knowledge drives outperformance.

This opening positions CBRE as a peer institution to the Rhode Island State Investment Commission rather than a traditional asset manager.

The refined corporate aesthetic and emphasis on global reach subtly transforms the dynamic from a standard capital-raising exercise into a potential institutional partnership.

This nuanced framing carries particular weight in public pension contexts, where investment staff must provide robust justification for manager selections to their boards.

Put simply, the slide does what any great opening slide should do:

Offers concrete evidence of institutional quality and operational depth.

The strategic choice to lead with institutional scale rather than performance metrics or investment strategy demonstrates sophisticated understanding of institutional dynamics. CBRE establishes themselves as an archetypal institutional partner for a state pension system – one defined by global reach, deep resources, and institutional-grade operations across every dimension.

Moving from CBRE's global presence to their Americas division reveals a deliberate narrowing of focus that strengthens their logistics investment narrative:

The second slide presents CBRE Investment Management Americas as a formidable regional powerhouse, with $60.2B in total AUM and $47.9B specifically in private real estate investments.

The strategic placement of 10 offices across major North American markets, visualized through dots on a continental map, demonstrates their ability to source and execute deals across every significant logistics corridor.

The sector allocation pie chart reveals a strategic conviction that transcends traditional portfolio diversification.

At 34% of Americas private real estate AUM, logistics stands as CBRE's dominant sector position, surpassing both office (27%) and residential (22%). This substantial allocation demonstrates CBRE's strategic assessment of market opportunities…and cement their capacity to execute in the logistics sector deep into the minds of investors.

Through meticulously presented data and visualizations, CBRE maintains their institutional-caliber communication while accomplishing a sophisticated pivot:

Bridging global capabilities with regional market mastery.

The geographic overlay highlighting major metropolitan centers - New York, Los Angeles, Dallas, Atlanta - corresponds precisely with primary logistics markets experiencing peak demand for modern warehouse facilities.

Here, CBRE is telling investors:

"We're already positioned in exactly the markets where modern logistics facilities are most valuable and hardest to replicate."

The presentation architecture executes a calculated narrowing of focus from broad organizational capabilities to specialized logistics expertise.

By showcasing logistics as their primary sector allocation, CBRE establishes deep sector credentials before unveiling their specialized strategy.

This creates an organic progression toward their forthcoming analysis of the logistics market opportunity.

Their substantial existing allocation positions them as deeply experienced practitioners who have already deployed significant capital in the space.

This measured revelation of sector expertise sets the stage for CBRE's specialized logistics investment thesis, building on their established institutional credibility with demonstrated sector conviction.

Having established their deep logistics expertise through portfolio allocation, CBRE now unveils the centerpiece of their pitch: U.S. Logistics Partners, which they've branded as a "Logistics 2.0 Fund."

The slide's stark simplicity masks its sophisticated messaging:

The introduction of CBRE's "One-CBRE" product marks a strategic evolution in their investment approach, integrating capabilities across their entire institutional platform. This unified strategy harnesses their full organizational expertise, from market intelligence to development execution.

Their investment approach addresses the core requirements of institutional investors by delivering both development returns and stabilized income yield.

This dual-return profile aligns precisely with institutional mandates for current income generation alongside capital appreciation potential.

The visual presentation at play here orchestrates three strategic elements through carefully selected imagery:

Modern logistics facilities set against urban landscapes, architectural renderings showcasing technical sophistication, and completed developments in strategically selected markets.

These visuals reinforce CBRE's integrated approach to modern asset creation, development expertise, and market selection. Their analysis that 72% of U.S. logistics stock requires modernization substantiates their focus on next-generation facility development.

The strategic partnership with Trammell Crow establishes CBRE's position as a developer of modern logistics facilities. Their geographic focus targets "smile markets" - the high-growth coastal and Sun Belt regions of the United States - demonstrating market selection that aligns with fundamental demographic and economic trends.

This combination of platform integration, development expertise, and strategic market selection positions CBRE to create institutional-quality logistics assets in markets with strong demographic tailwinds.

Now, CBRE pivots to articulate the fundamental drivers reshaping logistics real estate - a move that transforms their investment thesis from theoretical to tangibly urgent:

The visual storytelling at play here aims to crystallize three interconnected forces propelling the logistics revolution.

The triptych presentation - featuring e-commerce analytics, warehouse management systems, and automated robotics - reinforces the narrative arc from consumer behavior to operational execution.

There’s a striking projection at the heart of this analysis:

E-commerce will capture 34.8% of retail sales by Q2 2035.

CBRE elevates this metric by weaving it into a rich tapestry of technological transformation. The central focus on AI-optimized inventory models creates an elegant bridge between evolving consumer demands and sophisticated operational solutions.

The architectural brilliance at this point in the pitch shows in the progression toward modern facility requirements:

As prop-tech innovations and complex warehouse management systems take center stage, the strategic imperative for modern logistics facilities crystallizes. Market forces and technological advancement converge to make next-generation development the clear path forward.

Consider the visual sophistication at play:

Institutional-caliber design elements frame tangible examples of warehouse automation and management systems in action. This artful balance resonates with institutional investors who need to evaluate both strategic vision and operational capability.

CBRE manages to demonstrate mastery of high-level market dynamics while showcasing granular execution expertise.

The synthesis of consumer trends, technological innovation, and operational excellence positions CBRE's development strategy as a natural response to market evolution. It “just makes sense”.

It makes sense…because their analysis clearly explains how e-commerce growth and technological advancement create concrete requirements for next-gen logistics facilities.

Having established the technological imperative, CBRE brings their automation thesis to life through four concrete examples that showcase exactly why modern logistics facilities command premium valuations:

The star of the show is their Kiva robotics implementation - those sleek, blue-lit autonomous vehicles that glide effortlessly across pristine warehouse floors.

These aren't just fancy toys and they’re a cut above the auto-mops blocking your cart at Sam’s Club; they slash labor requirements by two-thirds while demanding the kind of flawless surfaces that only modern facilities can provide.

It's a perfect example of how infrastructure requirements and operational efficiency intertwine in contemporary logistics.

Just as impressive are the automated racking systems towering in the upper right of this image.

In traditional warehouses, these spaces would be limited by human reach and forklift access.

But modern automation transforms every cubic foot into productive storage, dramatically increasing facility capacity without expanding the footprint. The density these systems enable is simply impossible to replicate in legacy buildings.

The lower images complete the automation story.

Those red automated pallet delivery systems eliminate the endless parade of forklifts that traditionally wear down warehouse floors and consume valuable space. And the automated trailer loading system virtually eliminates the product damage and workplace accidents that plague manual loading processes.

What's particularly clever about this slide's construction is how it builds from the ground up - literally.

From the specialized flooring needed for Kiva robots to the vertical racking systems that maximize cube utilization, each image reinforces why modern logistics facilities represent a fundamentally different asset class than their predecessors.

The message is clear:

You can't simply retrofit old warehouses with new technology.

The future of logistics demands purpose-built facilities designed around automation from the foundation up.

After demonstrating the technological imperatives driving modern logistics, CBRE masterfully shifts perspective to show exactly how these automated facilities fit into the broader supply chain ecosystem:

The simple visualization of logistics trade flows on this slide turns complex supply chain dynamics into a clear, actionable investment framework.

Their analysis segments the logistics landscape into three strategic categories - National Intermodal, Regional Distribution, and Urban Fulfillment - demonstrating deep understanding of modern supply chain architecture.

What makes this an effective opening to the portfolio section is how it connects theory and tactical execution:

The top half presents a clean, theoretical framework using intuitive iconography and flow diagrams.

Then CBRE grounds these concepts in reality through three specific assets from their portfolio:

Port LA Distribution Center representing intermodal logistics, Speedway Commerce Center showcasing regional distribution, and 640 Columbia demonstrating urban fulfillment.

The progression from massive intermodal facilities to last-mile urban fulfillment centers also tells a story about CBRE's execution capabilities across the entire logistics spectrum.

Rather than specializing in just one node of the supply chain, they're positioning themselves as experts who understand - and can invest in - every critical junction of modern logistics infrastructure.

This comprehensive approach resonates particularly well with institutional investors who seek managers capable of building diversified exposure to the sector's full opportunity set.

Having mapped out their logistics network strategy, CBRE now presents the hard numbers that validate their execution capabilities:

Real quick...

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CBRE's portfolio commands attention through sheer scale:

$6.05 billion in gross asset value and $3.6 billion in net asset value distributed across 69 assets spanning 31.7 million square feet.

These numbers speak to institutional-grade execution capability, but they represent only the foundation of CBRE's investment thesis.

The geographic distribution is a study in sophisticated market selection strategy. CBRE has built dominant positions in supply-constrained coastal markets, with 57% of assets in the West and 23% in the East.

These regions consistently demonstrate premium rent potential for modern logistics facilities. The measured allocations to the South (15%) and Midwest (5%) reflect strategic deployment in select opportunities rather than broad regional exposure.

Performance metrics illuminate CBRE's value creation capabilities. Current portfolio rents running 38.5% below market rates signal substantial embedded NOI growth potential within existing assets.

This is self-evident in CBRE's track record - they've achieved 33% rent growth since initial underwriting across the portfolio.

A carefully balanced 3.7-year development-adjusted weighted average lease term (WALT) provides stable cash flow while maintaining exposure to near-term market rate acceleration.

These metrics validate CBRE's strategic framework in real-world application.

Their concentration in coastal markets aligns precisely with their automation investment thesis - these regions present the optimal combination of high labor costs and severe space constraints that make technological investment essential.

The portfolio demonstrates both institutional scale with $6B+ gross asset value and exceptional execution through 33% realized rent growth.

After establishing their portfolio-level metrics, CBRE zooms in to showcase two assets that perfectly exemplify their investment thesis in action.

This move from macro to micro storytelling gives a name and a face to any otherwise “abstract strategy” up to this point.

100,000 parcels per day, 100% occupancy, and rents 17.1% below market in a submarket with just 4.6% vacancy.

The brilliance here is in how CBRE highlights that this facility services 80% of Brooklyn's most affluent ZIP codes. This isn't just any warehouse; it's a strategic infrastructure node in America's largest consumer market.

The architectural cross-section image shows how the three-story design with freight elevators maximizes cubic footage on a tight urban footprint. The Manhattan skyline in the background serves as a subtle reminder of the facility's irreplaceable location and the impossibility of replicating this asset in today's market.

Throw it on Instagram. It’s a perfect pic.

Park Aldea Phase II then demonstrates CBRE's execution capabilities in regional distribution markets.

The 570,000 square foot development has already achieved 100% occupancy, with actual rents coming in 47% above pro forma - a stunning validation of their market analysis.

The aerial photo drops hints of its own: vast swaths of undeveloped land surrounding a state-of-the-art logistics facility, suggesting both first-mover advantage and future barriers to entry.

The most noteworthy aspect of these case studies is their contrasting nature - urban infill versus regional distribution, renovation versus ground-up development, East Coast versus Southwest.

And yet, they both share common threads:

Strategic locations, modern specifications, and significant rent upside.

By presenting these assets at this point in the pitch, CBRE proves they're actively capitalizing on the evolution of logistics across multiple markets and strategies.

The progression from portfolio metrics to specific assets also serves another subtle purpose:

It demonstrates CBRE's ability to execute their strategy across diverse geographies and product types while maintaining consistent investment discipline.

After showcasing individual assets, CBRE unleashes their knockout punch: dominant performance metrics that validate their entire investment approach.

(Note the unsubtle use of “accolades” in the headline.)

The numbers here are heavy-hitters:

Ranked #1 out of 38 funds for both Q3 2024 and full-year 2023 performance in the AFOE, with benchmark outperformance of 149 and 1537 basis points respectively.

The strategic decision to pair these accolades with another view of Park Aldea Phase II reinforces the connection between their development expertise and superior returns. The aerial photograph serves as visual proof of their execution capabilities, while the performance numbers above quantify the resulting value creation.

The subsequent slide dissects their returns with surgical precision:

CBRE's U.S. Logistics Partners has delivered a staggering 14.73% gross return since inception, compared to the NPI Industrial benchmark of 8.10%.

Furthermore, they've maintained this outperformance across different timeframes - from quarterly (2.65% vs 1.11%) to one-year (2.20% vs 0.25%) periods.

What stands out in the detailed performance breakdown is the balance between income and capital appreciation. The 0.20% income return and 2.45% capital return in Q3 2024 demonstrate their ability to generate both current yield and value appreciation - a crucial consideration for institutional investors looking for both income stability and growth potential.

Then, the transparency in fee reporting adds another layer of institutional credibility.

By showing returns both gross and net of fees, including scenarios with actual versus highest possible fees, CBRE demonstrates confidence in their value proposition.

The minimal fee drag - with net returns of 11.55% versus gross returns of 14.73% since inception - validates their fee structure relative to the substantial outperformance delivered.

After demonstrating their performance superiority, CBRE unveils the architectural blueprint of their organization - and it's far more sophisticated than a simple org chart.

The first slide introduces CBRE's vertically integrated model, which brilliantly solves a common institutional investor concern: the disconnect between investment strategy and operational execution.

By unifying the Investor-Developer-Operator functions under one roof, CBRE eliminates the principal-agent problems that often plague real estate investments.

The structure flows seamlessly from high-level strategy through Americas CIO down to granular property management oversight.

Worth noting here is how Trammell Crow Company is woven into this ecosystem:

Rather than operating as a siloed development arm, TCC's logistics expertise is fully integrated into the investment decision-making process.

This means development opportunities are evaluated simultaneously through investment, construction, and operational lenses - a huge advantage in a sector where building specifications can make or break long-term value.

The next slide humanizes this institutional framework by introducing the key players with strategic intent:

The team structure here puts deep specialization across critical functions on full display - from dedicated portfolio management to specialized logistics sector expertise.

The years-in-industry metrics are particularly impressive:

Senior leadership averaging over 20 years of experience, while maintaining fresh perspective through rising talent at the analyst level.

For institutional investors who keep their eyes open for managers capable of navigating both market complexity and sustainability imperatives, CBRE's organizational design highlights clear-cut strategic advantages.

Why This Pitch Works

CBRE transforms what could be a standard “warehouse investment story” into an absolute clinic in market evolution and technological change.

They open with a powerful statement of scale - $148.3B in global investments - before zooming in on their Americas logistics expertise and unveiling their "Logistics 2.0" strategy.

This carefully orchestrated journey builds trust through demonstrated capability before diving into where the market is headed.

Like skilled chess players, CBRE positions their pieces carefully, ensuring each move strengthens their ultimate strategic vision.

CBRE connects the dots brilliantly between rising e-commerce trends and the nuts-and-bolts requirements of modern warehouses. When they show that 72% of existing warehouses need modernization, the message lands with crystal clarity:

The future of logistics demands a completely new approach.

And their case studies bring this vision to life.

In Brooklyn, they're crafting urban fulfillment centers that serve America's densest population center. Meanwhile, in Phoenix, they're building massive regional distribution hubs that keep the Southwest's supply chains humming.

These are the proving grounds for CBRE's vision of next-generation logistics.

CBRE's pitch managed to blend technical know-how with clear strategic thinking while being neither heavy-handed nor glib on any slide.

They prove they understand both the intricate details of automation technology and the big-picture evolution of supply chains.

But they never lose sight of their core mission: building the next generation of logistics facilities that will power our digital economy.

For an investor like RISIC, CBRE offers a rare combination:

The resources of a global powerhouse with the specialized expertise of a logistics pure-play.

The message rings clear:

CBRE brings both the vision to spot market shifts and the muscle to capitalize on them.

In the rapidly evolving world of logistics real estate, that's exactly what institutional investors need.

Real quick...

Does your pitch tell a story as compelling as BlackRocks's? BetterPitch specializes in creating investment materials that resonate with institutional investors. From market analysis to strategy presentation, we help managers build world-class marketing collateral to raise capital more efficiently.

See you next friday,

-PitchDeckGuy

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