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Forest City lists Post Office Plaza for lease, potential sale

By awarding an exclusive leasing agreement to the Cushman & Wakefield CRESCO brokerage for Post Office Plaza that includes its potential sale, Forest City Realty Trust Inc. (NYSE: FCEA,FCEB) has signaled the availability of one of the largest office vacancies in downtown Cleveland.

According to online realty data service CoStar, the 435,000-square-foot building at Tower City Center has 267,000 square feet of office space available, the largest volume of market-ready office space downtown.

The other properties with more available space are part of substantial redevelopment projects, such as the $250 million conversion of the 1.6 million-square-foot Union Trust Co. building to a hotel, offices and apartment, and 339,000 square feet at Tower at Erieview, where the building owner has signaled interest in converting part of the building at 1300 E. Ninth St. to apartments. Union Trust, 925 Euclid Ave., would have about 400,000 square feet of renovated office space after the planned conversion of parts of the landmark to other uses.

Post Office Plaza is a landmark in its own right, dating from 1925 and converted to office by Forest City in 1990 as part of its redevelopment of the Terminal Tower complex as Tower City Center. The property has lost several tenants to downsizing and relocation over time, most recently the move of the Cleveland office of Quicken Loans to the nearby Higbee Building, which is owned in a partnership by Quicken founder and Cavaliers owner Dan Gilbert.

Bill Saltzman, a CRESCO executive vice president and head of the Independence-based brokerage's office unit, said it will be a "full court press" to market the Post Office Plaza space, especially with the brokerage's local, regional and national contacts.

"With its large floor plates, sky-lit atrium lobby and connectivity to Public Square, Tower City, and public transportation, Post Office Plaza represents a unique opportunity to accommodate the space requirements of a number of large office tenants, including a corporate headquarters," Saltzman said.

Although CRESCO did not mention it in an Oct. 7 news release, CRESCO also has a listing to sell the property at 1500 W. Third St. with an undisclosed asking price, according to the property's CoStar summary.

Saltzman said the sale listing signals the property would be available for purchase if a large user wants to buy it as well as occupy it, or to team up with a different real estate developer who would buy it and lease it to a large user.

However, Post Office Plaza being on the market is no surprise. Forest City has sold the other pieces of Tower City over the past few years, including the iconic Terminal Tower and The Avenue retail center last summer.

Despite being based in Cleveland, the real estate investment trust has been shedding most of its Northeast Ohio properties as part of a plan to focus its investments on large cities with more dynamic realty markets, such as New York City and San Francisco.

Rico Pietro, a CRESCO principal who is also working the Post Office Plaza assignment, said, "There are number of elephantine-sized tenants in the market, but this is also a time to give Post Office Plaza a new look given all that is going on around it, such as the renovation of Public Square." Pietro also represented Forest City and K&D on the Terminal Tower deal.

Previously, CBRE Group handled leasing on Post Office Plaza.

David Browning, managing director of CBRE's Cleveland office, declined comment.

Jeff Linton, Forest City spokesman, did not respond to an email asking about the change in brokers by 2:20 p.m. on Thursday, Oct. 13. However, the company typically does not comment on individual buildings and assignments in Cleveland.

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Cushman & Wakefield | CRESCO Real Estate selected as exclusive leasing agent for Post Office Plaza

Cushman & Wakefield | CRESCO Real Estate is pleased to announce its appointment as exclusive leasing agent for the iconic Post Office Plaza located in downtown Cleveland.

Forest City Realty Trust, affiliated with the ownership of Post Office Plaza, and CRESCO Real Estate have worked together on a number of transactions recently, including the recent disposition of the Terminal Tower, the 52-story landmark skyscraper, on Public Square.

"We are delighted to have the opportunity of working on this important project with the talented team at Forest City" said Rico Pietro, a Managing Partner at CRESCO Real Estate.

Activity in the central business district of Cleveland is vibrant. Three hundred residential units will be added to the Terminal Tower by 2018, while several large office tenants are currently seeking prime office space in downtown Cleveland, including Forest City. The timing of the engagement could not be better for Cushman’s Cleveland office.

"With its large floor plates, sky-lit atrium lobby and connectivity to Public Square, Tower City, and public transportation, Post Office Plaza represents a unique opportunity to accommodate the space requirements of a number of large office tenants, including a corporate headquarters," said Bill Saltzman, Executive Vice President and Director of Office Services for CRESCO Real Estate. He added, "We are honored to have been awarded this important assignment."

"It’s such an exciting time in Cleveland! We are pleased to have such a well-connected team of real-estate professionals

representing our interests in this market," said Jim LaRue, Director of Asset Management and Property Oversight.

About Forest City Realty Trust, Inc.

Founded in 1920 and based in Cleveland, Ohio, Forest City’s diverse portfolio includes hundreds of exceptional properties

located throughout the United States. Forest City Realty Trust, Inc., an NYSE-listed national real estate company principally engaged in the ownership, development, management and acquisition of commercial and residential real estate throughout the United States.

About Cushman & Wakefield | CRESCO Real Estate

Cushman & Wakefield | CRESCO Real Estate is one of Greater Cleveland’s most respected commercial real estate firms.

CRESCO is an independently owned and operated member of the Cushman & Wakefield Alliance. Their scope of services includes: the sale and lease of commercial, industrial and office properties, land acquisition and development, site selection and build-to-suits, property valuation, property management, consulting services, corporate services and tenant/landlord/ buyer/seller representation. To learn more, visit http://www.crescorealestate.com or follow @CRESCO_RE on Twitter.

About Cushman & Wakefield

Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. C&W’s 43,000 employees in more than 60 countries help investors and occupiers optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

For more information regarding the Post Office Plaza, please contact Bill Saltzman.

Office: 216.525.1499

Cell: 216.536.0608

Email: bsaltzman@crescorealestate.com

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Forest City Realty Trust Sells Cleveland’s Iconic Terminal Tower

K&D Group has purchased Terminal Tower at Tower City, Cleveland’s second tallest building, from Forest City Realty Trust.

The 584,000-square-foot building, which stands at 771 feet with 52 floors, was originally built as an office building above the Cleveland Union Terminal in 1928.  It was the tallest building in North America, outside of New York, until the completion of the Prudential Center in Boston in 1964.

This centerpiece and the mascot of Cleveland is not only known for its appearance and history, but is well known for its 508 LED lights that shine over Cleveland. These lights can be seen in various colors to support local groups, holidays and even Cleveland’s sports teams.

Cushman & Wakefield | CRESCO Real Estate represented  the buyer in the purchase. Rico Pietro, a managing partner at CRESCO, was the sole broker on the transaction.

Doug Price and Karen Paganini, principals at K&D Group, will add the property to its diverse and ever growing inventory of property in the central business district. K&D has not publicly released its plans.

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Rico Pietro, Managing Partner at Cushman | Wakefield CRESCO Real Estate Represented K&D Group in Terminal Tower Sale

Cushman & Wakefield | CRESCO Real Estate, downtown Cleveland’s preeminent commercial real estate firm, represented K&D Group in the purchase of Terminal Tower at Tower City from Forest City Realty Trust. Rico Pietro, a Managing Partner at CRESCO, was the sole broker on the transaction. Doug Price and Karen Paganini, Principals at K&D Group will add the property to its diverse and ever growing inventory of property in the central business district. K&D has not publicly released its plans but are peerless leaders in residential redevelopment in the downtown market.

The Terminal Tower is Cleveland’s second tallest building, standing at 771 feet with 52 floors covering a total of 584,000 SF. The Tower was originally built as an office building above the Cleveland Union Terminal, which opened in 1928. It was the tallest building in North America, outside of New York, until the completion of the Prudential Center in Boston in 1964.

This centerpiece and the mascot of Cleveland is not only known for its appearance and history, but is well known for its 508 LED lights that shine over Cleveland. These lights can be seen in various colors to support local groups, holidays and even Cleveland’s sports teams.

“Our commitment to offering best in market luxury living for Cleveland residents will only improve with the market’s premier address. Rico Pietro brought us Terminal Tower and worked through complex business terms to deliver a seamless transaction for K&D.”- Doug Price, CEO of K&D.

For more information regarding the transaction of Terminal Tower, please contact Rico Pietro.

Office: 216.525.1473
Cell: 216.235.1559
Email: rpietro@crescorealestate.com

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Terminal Tower Sold to K&D Group in $38.5 Million Deal; Apartments Planned for 12 Floors

Terminal Tower, downtown Cleveland’s most iconic skyscraper, changed hands Thursday in a $38.5 million deal that will trigger a mixed-use redevelopment project and a major corporate headquarters move.

The K&D Group, Inc., bought the 52-story office building from Forest City Realty Trust, Inc., the homegrown, publicly traded company that owned Terminal Tower for 33 years. Now K&D plans to transform 12 of the tower’s lower floors into 293 apartments, in a project that could start in late 2018 and conclude in 2020.

The transaction marks a changing of the guard for a Cleveland landmark at a time of heightened interest and sales activity downtown.

The Millennia Companies of Valley View has a contract to buy Key Tower from an out-of-town, publicly traded seller later this year. Other buildings, including much of the Tower City Center complex surrounding Terminal Tower, have new owners who are chasing tenants or contemplating redevelopments. Pubic Square, refashioned as a more unified, greener park, sits at the center of the action, beckoning investors and passersby.

K&D, the region’s largest privately held owner and manager of apartments, expects to maintain Terminal Tower’s upper floors as offices. The observation deck still will be open on weekends during most of the year. The building’s broader, lower floors – four through 15 – will become one- and two-bedroom apartments, following the trend of turning challenging or obsolete downtown office space into housing.

“It’s pretty much a miracle,” Doug Price, K&D’s chief executive officer, said of the relatively swift timeline for concluding such a complicated deal at a multi-building, mixed-use complex where other transactions have taken much longer to close. The Plain Dealer first reported on the potential sale in May.

“Forest City was very good to work with,” Price said. “It was pretty smooth.”

The account, a playful personification of the tower and it’s lighting scheme, is merely under new management.

After markets closed Thursday, Forest City confirmed the details in a news release.

“We’re pleased to complete this sale, which aligns with our strategy of focusing our real estate portfolio on our major core markets, which include New York City; Washington, D.C.; Boston; Dallas; Denver; Los Angeles; and San Francisco,” David LaRue, the company’s president and chief executive, said in the news release.

The company bought Terminal Tower in 1983 and moved its headquarters into the building in 1997. Forest City launched a search for new corporate offices earlier this year. The real estate investment trust’s current space, roughly 250,000 square feet, is outdated, fragmented and too large for a business that has restructured dramatically since the recession of 2007 to 2009.

Now Forest City could fit into 150,000 to 180,000 square feet of more modern space. The company has looked at new construction and existing buildings, including Post Office Plaza, its only remaining asset at Tower City. An announcement about new digs is likely within the next few months.

“We have narrowed the list somewhat,” Jeff Linton, a spokesman for the company, said Thursday afternoon. “But we have not made a decision. We’re still going through a very thorough process, getting input from our own associates.”

As part of the deal with K&D, Forest City will continue to lease its current offices until mid-2018, with options to extend that lease if the relocation process takes longer.

Forest City’s pending move, combined with K&D’s residential redevelopment plan, made for an unusual transaction. It was tough to predict what value the buyer and seller would place on the property. And it’s no small feat to line up financing for a building that is set to lose its anchor tenant within two years.

“This wasn’t a building that was being purchased off a rate of return,” said Rico Pietro of Cushman & Wakefield | CRESCO Real Estate, who represented K&D in the acquisition. “This is an evaluation of what this property could be, and what it’s worth when it’s ultimately redone. … There’s still a ton of work to do to get this thing developed as the gold-standard housing product in the central business district.”

PNC Financial Services Group, Inc., provided the mortgage, Price said.

Between the purchase and the redevelopment work, Price put the total price tag of the Terminal Tower project at $100 million. K&D expects to seek federal and state historic preservation tax credits to assist with the renovations.

Forest City already employed historic tax credits for a four-year restoration and modernization project that wrapped up in 2010. But the lifespan of those credits is nearly done, making the building eligible again before K&D starts construction.

K&D plans to apply for property-tax abatement for the apartments – an incentive that Cleveland routinely grants for residential developments that meet certain green construction standards. The company also intends to ask Cleveland to approve tax-increment financing, which would redirect part of the new property-tax revenues created by the apartments to paying off debt. That arrangement, called a TIF, would apply only after the tax abatement burns off.

Price and K&D President Karen Paganini have hired Westlake Reed Leskosky of Cleveland, the architectural firm that previously worked with Forest City to study Terminal Tower’s potential as an apartment building. At this point, prices for the units haven’t been established. But they won’t be sky-high, Price said.

“If we can’t get decent rents there, I don’t know where we can get them,” he said of Terminal Tower, which was built in the 1920s and was the tallest building outside of New York City until the mid-1960s. “But we’re not going to stretch the market. We’re going to do something that’s not at the top of the market.”

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Cushman & Wakefield Launches Automotive Specialty Practice Group

In response to the unprecedented transformation and growth in the auto industry, Cushman & Wakefield has launched an Automotive Specialty Practice Group led by Jeffrey Green, a managing director within the firm’s Global Occupier Services business. The new group includes a global, cross-discipline team of experienced and accomplished real estate and business advisors to auto manufacturers, suppliers, distributors and retailers.

Cushman & Wakefield is the first commercial real estate service firm to the market with a global comprehensive Auto SPG offering. Its mission is to deeply understand and address the distinctive challenges of the automotive sector from labor issues, logistics, infrastructure, technology, credits and incentives, to the unique requirements of the real estate itself.

“The world is on the verge of an Automotive Revolution, sparked by disruptive, technology-driven trends such as diverse mobility, autonomous driving, electrification and connectivity,” Green noted. “We believe these trends will result in an increased need for commercial real estate globally. In addition to inherent growth within existing automotive and supply manufacturers, we see emerging market opportunities in such markets as China, India, Brazil and South Africa, as well as the entry of non-traditional players like Google, Apple, Microsoft and Panasonic.”

Cushman & Wakefield has the client base and expertise to offer a comprehensive global specialty practice, according to Green. The firm already works with dozens of automotive industry clients around the world, including major names like Toyota, BMW, FCA, Mercedes Benz, Magna International, Faraday Futures, Hyundai, JLR, and many others.

“Our professionals are leaders in leasing, purchasing and selling automotive-use properties – involved with millions of square feet of transactions a year – with expertise that goes beyond local real estate markets,” Green said. “What differentiates us is our collaborative approach and diverse expertise which enables us to assist companies along the entire supply chain, from production to point of sale.” He noted that the Auto SPG will work in cohesion with other Cushman & Wakefield specialty practice groups such as Technology, Ports & Intermodal, Global Supply Chain, 3PL and Build to Suit.

“There is no other industry more primed for Cushman & Wakefield to dominate than automotive,” noted the firm’s John Morris, executive managing director and industrial services lead for the Americas. “Our industrial platform is well established on a global basis, with a deep commitment and ongoing investment in growing our presence in key markets for this vital industry. Under Jeff’s leadership, we have the opportunity to establish ourselves as the leading multi-services real estate provider for this market.”

Call us today at 216.520.1200 to find out more about how we can help you.

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Cushman & Wakefield Honored in CIO 100 Awards

CHICAGO–(BUSINESS WIRE)–Cushman & Wakefield, a global leader in commercial real estate services, has been recognized as an Honoree in CIO Magazine’s CIO 100 Awards program showcasing organizations that deliver innovation and business value from IT.

Global President of Cushman & Wakefield, Tod Lickerman, said creative thinking and the innovative use of technology helps the firm serve its people and clients for real estate services in more than 250 offices across the globe.

“We are proud to receive this honor and commend our Global Chief Information Officer, Adam Stanley, for his role in spearheading the services of our great technology team. They’re working hand-in-hand with our business leadership to drive colleague productivity, client connectivity, and data driven insight through technology,” said Mr Lickerman.

Cushman & Wakefield’s Adam Stanley conducted a global review of the firm’s technology group, after its $2 billion merger with DTZ in September last year. This process had involved assessing talent, tools, and processes across both legacy organizations. The teams are leveraging the best from both as well as building new world class solutions.

“The CIO 100 Award is all about the team, and we have great leaders around the world focused on identifying and implementing cloud-based, mobile-enabled, client-focused technology,” Mr Stanley said. “Analytics are critical for our clients and this recognition was in particular based on work we have done in that space. We will continue to invest in bringing valuable insight to clients.”

In congratulating the Honorees, Dan Muse, Editor in Chief of CIO.com, said CIOs have always been serious about understanding, enabling and even driving business. “CIOs have claimed seats on boards and edged closer to CEOs as digital transformations take hold. The IT executives we recognize this year did not wait to be invited, and they’re not unsure of where to focus their time, energy and budgets. They mean business, and they’re taking action,” said Mr. Muse.

Under Mr. Stanley’s leadership, DTZ, before its 2015 merger with Cushman & Wakefield under the Cushman & Wakefield brand, was named to the CIO 100 for 2015 by CIO Magazine. Mr. Stanley has also been honored as one of Chicago’s Tech 50, Infoworld Premier 100 leader, and Huffington Post’s Most Social CIOs.

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Pair Purchases 12-Building Park in Solon for $11.5M

After 30 years of institutional and public real estate company ownership, Raintree Industrial Park in Solon is back in local hands after two below-the-radar 30-somethings snagged it for $11.5 million.

Lowell Mintz and Geoffry Brouman, who operate Titan Realty Co., late last month bought the 12-building portfolio from Chicago-based Equity Commonwealth, the Sam Zell-led realty behemoth aggressively shedding noncore properties in second-tier markets. Equity also is expected by realty insiders to close soon on the sale of the North Point Tower downtown to San Bernardino, Calif.-based Hertz Investment Group.

While Raintree is also huge — half-a-million square feet of rentable industrial and office space — its 1970s-vintage precast construction does not have the glitz and profile of the downtown office building or even as industrial property the newness valued by big-wheel out-of-town real estate investors. But that suits Mintz and Brouman just fine.

“It fits squarely in our portfolio,” Mintz said. “We can buzz there in five minutes.”

Mintz declined to disclose the size of the Solon-based firm’s portfolio but said it includes seven industrial properties in the southeast suburbs, other industrial buildings elsewhere and shopping centers. The stable includes one office building, but he said that sector is not a focus.

Brouman said the duo likes the variety of the buildings — with a range of building sizes and vacancies — as well as the ability to house young companies that may grow into larger properties. As Titan is based in Solon, it’s also a city they know well.

Raintree retained Bob Garber, a principal at the Independence-based Cushman & Wakefield CRESCO brokerage, to represent them exclusively in leasing Raintree Industrial Park because he has handled leasing for them through three prior ownership groups. Garber also represented Equity Commonwealth in the sale, while the buyers represented themselves.

Garber is looking forward to working with the new owners, whom he has known for a decade, and a different approach from local investors than the institutions and real estate investment trusts he previously worked with on the properties. The properties line Naiman Parkway, named for the original owner and builder, Solon real estate developer Joseph Naiman.

“These are back-of–the-napkin guys,” Garber said. “As a small organization, they can be in the park every day. They understand what it takes to do a deal in Cleveland rather than go through committees, make sure it checks every box for the company and matches the pro forma. They can hear about a 3,000-square-foot deal and say, `Let’s do it.’ ”

The portfolio has some space to fill with a 15% vacancy rate. Since Raintree Holdings completed the purchase late last month, the new owners have started a plan to spruce up the park, from engaging a landscaper to removing overgrown shrubbery and repairing parking lots.

The acquisition loan, Mintz said, also includes some funds to make improvements to the buildings and adapt the properties to new tenants.

Mintz, 38, and Brouman, 37, had to be convinced to discuss the acquisition by Garber.

“We realized this is large enough people would want to know about it,” said Mintz, whose sister, Jackie Mintz, serves as vice president of operations. None of the three men would discuss the sale price for the portfolio, which Equity disclosed in its most recent results July 30.

Peggy Dorman, Solon economic development coordinator, said she needed no introduction to Titan’s operators. She said the city has worked with them for years to attract new businesses to their properties.

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World Wildlife Fund's U.S. Headquarters Awarded USGBC National Capital Region LEED for Existing Buildings Project of the Year

The U.S. Green Building Council National Capital Region (USBGC NCR) has recognized World Wildlife Fund’s U.S. headquarters, located in Washington, DC, as the LEED for Existing Buildings Project of the Year. The award was presented to World Wildlife Fund and the Cushman & Wakefield Sustainability and Property Management teams at a recent awards ceremony.

“World Wildlife Fund’s vision and dedication to improving both the built environment and our natural ecosystems was tantamount to our success in this project,” said Katie Ross, Senior Project Manager at Cushman & Wakefield. “It was a joy to work with such a driven and innovative partner on this LEED Platinum Recertification project and we are thrilled to receive recognition from the USGBC for the project’s success.”

WWF’s U.S. headquarters, located at 1250 24th Street NW in Washington, DC, is designed to support WWF’s environmental mission, with a focus on efficient resource use, protecting natural habitat and creating a positive work environment. In 2015, WWF engaged Cushman & Wakefield’s Sustainability Services team to oversee the LEED for Existing Buildings (LEED EB) recertification process. As part of the LEED EB process, Cushman & Wakefield completed an ASHRAE Level II energy audit whose recommendations projected an annual savings of 98,083 kWh and $14,812. By incorporating the audit report’s recommendations into operations, the building’s ENERGY STAR score has risen to 86 since 2015 (as of June 2016).

In an effort to reduce water consumption, WWF retrofitted the building’s water fixtures resulting in water savings of 35.7% below the LEED baseline usage. WWF improved its recycling and composting programs and is currently diverting over 70% of its waste from the landfill each month. WWF also partnered with the National Park Service, U.S. Forest Service and others to complete a deal that protects 667 acres in the North Unit of Badlands Park, which will be used to help expand habitat for bison and other wildlife.

WWF’s underground parking garage offers space designated for bicycles and electric vehicles, and a Capital Bikeshare station is located just outside the building’s main entrance. WWF also operates a shuttle to the closest Metrorail stations during rush hour. Its “Panda Friday” program also offers WWF employees flexibility to work a compressed workweek to reduce commuting-related GHG emissions. By using these options, the building demonstrated a 76.2% reduction in conventional commuting. Additionally, the green roof at the WWF headquarters is one of the largest green roofs in Washington, DC, and provides storm water runoff mitigation and improved habitat for occupants and wildlife alike.  Achieving the LEED Platinum recertification at World Wildlife Fund’s headquarters both affirms and drives forward WWF’s environmental mission and action driven culture.

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Cushman & Wakefield Named #1 Industrial Leasing Market Share in the U.S.

Leading, and winning, in industrial real estate is not optional, and not something we take lightly. It’s serious business, and it is in our DNA. Our occupier and owner clients depend upon our expertise and our platform each and every day. We truly believed, and now know to be true, that the collaboration, talent, coverage and institutional knowledge that emerged from our newly integrated firm would win the day.

It has.

When we reviewed the third party industry data that conclusively demonstrated and documented our number 1 position, we knew our model was working.  Post merger, our clients are staying with us, and more prospects are willing to work with a new leader.

So while we celebrate our market share accomplishment, we must pause to thank our valued clients and the industrial professionals upon whom they depend. You professionals are why we wake up running and do as much as we can to help your efforts each day. We are proud to be your partners. Thank you.

Most importantly, we plan to continue to lead from the front. We are actively recruiting the best in the business. We are expanding our skills and talent, especially across crucial sectors like eCommerce, F&B, 3PL, BTS, ports/intermodal, logistics and supply chain. We know tomorrow brings new challenges and new opportunities, and we expect to be ready.

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