The reported shutdown of trucking company Yellow Corp. has potential implications for the industrial real estate market as it could release over 300 properties that the company owns and leases nationwide.
Based in Nashville, Tennessee, Yellow Corp. ceased its operations on Sunday, according to a statement from the International Brotherhood of Teamsters, the union representing some of the company’s workers. The company employed around 22,000 Teamsters members and had approximately 30,000 total employees. Yellow Corp. has faced financial challenges in recent years due to mounting debt and reduced shipping demand.
Alongside a vast fleet of trucks and trailers, Yellow Corp. is a significant owner and tenant of truck terminals and warehouses. Its most recent annual report states ownership of 166 properties and leasing arrangements for 142 other facilities.
The union was notified that Yellow Corp. plans to file for bankruptcy. If the company files for a bankruptcy court liquidation, a trustee may be appointed to oversee the sale of company assets, including truck terminals and warehouses.
Considering the low vacancy rates in the industrial real estate sector, the trustee is likely to obtain attractive prices for the properties. National vacancy rates for industrial properties currently stand at 4.9%, well below the 20-year average of 7.3%. This influx of properties for sale could provide much-needed opportunities for those seeking available sites in a market with limited options.
As Yellow Corp. may walk away from its active leases, landlords will likely need to file appearances as creditors in the bankruptcy case. This situation could impact both landlords and tenants in the affected properties.
Yellow Corp.’s owned and leased properties are spread across the country, with a concentration on the East Coast. Some of its most prominent properties include service facilities in Chicago Heights, Illinois, and Winston-Salem, North Carolina, as well as locations in Maybrook, New York; Carlisle, Pennsylvania; Cincinnati; Greenville, South Carolina; and Nashville.
This is not the first time Yellow Corp. has faced a potential collapse. During the pandemic, the company received a $700 million bailout loan from the Trump administration due to concerns that its shutdown would pose a security threat due to the transportation of certain goods.
As the situation unfolds, there are potential opportunities for investors and users seeking industrial properties. The impact of Yellow Corp.’s shutdown will depend on the final outcome of the bankruptcy process and how the properties are managed and repurposed in the market.
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