John Planeta Has $700M Worth of Transportation Facilities to Sell

CBRE’s John Planeta has built his career brokering the purchase and sale of distribution facilities and transportation-related real estate, securing fulfillment centres for big-name retailers such as Loblaw, Gap and Target, and for third-party logistics providers like SCI Group, CEVA and DHL.

As the Canadian lead for CBRE’s Global Supply Chain Practice, Planeta has managed some of the country’s largest and most complex supply chain transactions, having completed 2,000-plus assignments around the world over more than three decades in the business.

So perhaps it’s no surprise that Planeta’s team was recently offered the opportunity to take on a challenging court-ordered assignment to sell 47 transportation facilities. What may be surprising is that the operators of these facilities, a portfolio valued at roughly $700 million, had gone into receivership after a five-year bull run for the logistics and distribution industry that started in 2019.

“It’s been a tougher market for the transportation industry and distribution facilities because of the decline in e-commerce and changing cross-border relationships,” says Planeta, a CBRE Toronto West-based executive vice president. “It’s one of the sectors that’s been hit the worst in the past couple of years.”

Part of the problem is that operators in the transportation sector tend to be smaller and jumped at growth opportunities. “You can be entrepreneurial and start a business with a few trucks and you expand from there,” Planeta points out.

“So a lot of the problem was companies that grew aggressively thinking that business would continue to grow. But then it dipped, and a lot of those companies found themselves overextended and ran into trouble.”

Receivership monitor EY-Parthenon reached out to Planeta, who was part of a group that had looked after the disposition of Target properties when the retail giant exited Canada a decade ago. Planeta also helped set Target up with three Canada-wide distribution centres when it originally made the move north in 2011.

“This is a relationship business and your reputation is everything. Based on our history and experience it was a natural segue the monitor would ask us to help with the sale of all these transportation facilities,” Planeta says.

Heavy Lifting

Planeta admits that it’s been a challenging assignment so far, but he’s uniquely positioned to take it on.

The properties span the continent – from Bakersfield, CA to Pompano, FLA, and from Surrey, BC to Laval, QC – each with its own set of unique challenges. And because the properties have different lenders, they had to be sold individually rather than as a portfolio.

Planeta’s initial understanding was that his services would only be required a couple hours a week.

“Well, at the moment it’s probably 30-plus hours a week of reporting, talking to lenders, talking to the monitor and different stakeholders,” he says. “I’m also building great contacts and strengthening relationships with the banking community and others focused on bankruptcies, receiverships and restructurings.

“It’s turned into something way bigger.”

“The monitor needed a trusted advisor to oversee everything across the continent, and I built that trust over time,” he adds, noting that at one point he’d recommended against a course of action the monitor thought they should take, and Planeta’s turned out to be the right call. “That helped to solidify that trust.”

“It’s been a wild ride,” he says, estimating that his team is more than halfway through getting the 47 properties sold. “I think we have 20 left. It’s been a lot of heavy lifting and very hard work.”

Partner Power

It helps that Planeta has a partner in every market in the U.S., on top of his tight-knit network of CBRE contacts across Canada. “I’m dealing with a different broker in Dallas and Montreal and Springfield, MO,” he says. “I’m running the account and dealing with local brokers in each market – and always trying to ensure we use the best CBRE people in places where we have a local representative.”

It seems there’s been no shortage of issues to address at the various properties, according to Planeta.

In Phoenix, a SWAT team had to be called out to deal with squatters who had set up camp in one vacant transportation facility. “Now we have guards sitting in pickup trucks with AR-15’s. I’m a real estate broker, not a security guard, but we’re doing what we need to.”

In Texas a severe weather incident blew the roof of another facility.

“So we’ve been trying to stickhandle all those challenges, and leveraging our network across the U.S.,” says Planeta. “But brokers across the platform have been great. They’re checking the properties and tending to the damage. It says a lot about the quality of the other CBRE brokers we’re dealing with.”

Most importantly, he adds, the assignment would not have been possible without the support of his team: Kalley Libera, Skylar Lam and his son Chris Planeta. “Everyone stepped up and performed beyond expectations. I’m so proud and humbled to be working with such great people.”

Healthy Dose of Perspective

Those working with Planeta benefit from his depth of experience. He’s seen multiple business cycles and for decades watched industrial properties in Canada lease within a tight band of largely unwavering asking rates.

Prior to the pandemic, rental rates in the Greater Toronto Area struggled to increase – until logistics and distributions demand changed everything. “I’ve seen boom times, busts and long uninspired periods in the market,” Planeta says. “Change is the only constant.”

“Those who succeed in real estate typically follow long-term strategies and the key to success with this receivership sale mandate will be finding the businesses who see these assets fitting into their plans and making the right recommendations to the monitor.

“You need to treat every property as if it was your own and make the recommendation that you would make if it was your own money at stake. These are great assets with a bright future for the right buyer.”