A new strategy by U.S. Immigration and Customs Enforcement (ICE) to convert warehouses into detention centers has seen the agency acquire at least 11 properties over the past couple of months, with plans to spend $38.3 billion on the new model.
The government aims to acquire and convert more than two dozen warehouses into detention centers and processing sites, which would collectively hold over 92,000 detainees.
ICE has paid between 11% and 13% above the price for comparable properties, with some warehouses selling for considerably higher premiums. The agency's plan has raised concerns among local governments, who fear the loss of revenue and infrastructure costs associated with the new facilities.
Construction of warehouses exploded during the pandemic, but the market has since struggled with oversupply and weaker demand, leading to a record high vacancy rate of 27% for new-construction warehouses.
Not every developer is willing to sell, with a dozen warehouse sales falling through due to opposition from public officials or the owners themselves.
