Electric Truck Maker Rivian Signs 7-Year Lease on a Distribution Center in Kentucky
Electric truck maker Rivian is already making plans for its expansion, even though the company has only delivered around 1,000 electric pickups so far. Most recently Rivian made headlines when its announced that its second U.S. factory will be built in Georgia. Now the company is leasing a massive distribution center in South Louisville, KY.
Rivian signed a seven year lease on the facility after it was purchased by real estate firm JLL Income Property Trust for $39.5 million then leased to the electric vehicle maker. JLL Income Property Trust is an institutionally managed daily Real Estate Investment Trust (REIT) that has over $5.9 billion in portfolio assets.
The seven year Rivian lease includes annual rent increases of 2.75 percent.
The lease deal was first reported by local news outlet Courier Journal.
Construction on the South Louisville facility was completed in Aug 2021. The property includes cross docking, 36-foot clear heights and energy efficient LED lighting. The location is a short drive from major distribution hubs including UPS Worldport 5.2 million square feet airport hub, UPS Centennial Hub, which is one of the largest UPS sorting facilities in the U.S. and Louisville International Airport.
The site is also about 100 miles away from Amazon's new $1.5 billion Air Hub in Cincinnati. The e-commerce giant is also a backer of Rivian and will use the company's electric delivery vehicles in its delivery fleet. Amazon ordered 100,000 delivery vans from Rivian.
In December, Rivian announced that Amazon Web Services Inc. will be its preferred cloud provider to deliver connected services, facilitate over-the-air software updates, and manage fleets of connected vehicles.
"South Louisville Distribution Center is an excellent fit within our geographically diversified industrial portfolio given its location near irreplaceable transportation infrastructure, state-of-the-art construction and the positive dynamics of Louisville's industrial market," said Allan Swaringen, JLL Income Property Trust President and CEO in a statement.
Last month, Rivian announced it will build its second factory in Georgia in a deal that local officials hope will make the state a leader in the next generation of the automotive industry.
The factory site in Georgia includes an area encompassing 1,978 acres marketed as the "East Atlanta Megasite." It's one of the largest available industrial sites in Georgia, according to state officials. It's also in proximity to rail lines, which can be used by Rivian to ship materials to and from the factory.
Its not clear what Rivian intends to do with the distribution site in South Louisville, but its proximity to major highways means it might become a vehicle staging area before shipping vehicles to customers in the eastern parts of the U.S., or used for other logistics operations.
In November, Rivian launched its highly anticipated IPO and raised $14 billion, making it the biggest IPO in the U.S. since 2014. The company's stock trades on the NASDAQ under the stock symbol "RIVN".
Rivian's market cap is currently $77.8 billion, making the company almost as valuable as U.S. automakers General Motors and Ford.
Rivian's first vehicle is the R1T electric pickup truck, which will compete with Ford's best-selling F-150, including the electric Lightning version that will hit the market later this year.
Rivian is also backed by Ford Motor Co.
Rivian's fully-electric R1T pickup and R1S SUV.
In an amended SEC filing on Nov 5, 2021 ahead of its IPO, Rivian said it had had approximately 55,400 R1T pickups and R1S SUVs pre-orders in the U.S. and Canada as of Oct 31, 2021. Each customer paid a fully refundable deposit of $1,000 to reserve their Rivian vehicle.
The vehicles are being produced at Rivian's EV factory in Normal, Illinois, which is currently equipped to produce a total of 150,000 vehicles annually, distributed between the R1T platform for Rivian pickup and SUV, as well as the RCV platform, which will be used to produce electric delivery vehicles (EDVs) for Amazon.
The current annual capacity for Rivian's two EV platforms is roughly 65,000 and 85,000 vehicles, according to the company, so Rivian will need to expand its manufacturing footprint to meet demand.
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