ICE Is buying up empty warehouses for new detention centers

The government said it plans to convert warehouses for an immigrant detention network that would collectively hold more than 92,000 people.

A New York developer last year completed construction of a million-square-foot warehouse about 45 miles east of Atlanta, but couldn’t find a tenant.

A commercial warehouse purchased by the Department of Homeland Security in Social Circle, Ga.

Then in February, a deep-pocketed buyer for the property suddenly emerged and agreed to purchase the warehouse for $129 million.

The buyer: U.S. Immigration and Customs Enforcement, which plans to convert it into a detention center for immigrants awaiting deportation.

ICE said it plans to spend $38.3 billion on a new detention model that includes acquiring warehouses

A planned ICE facility in Roxbury, N.J.

“You paid $129.3 million for a facility in my state that was assessed at less than half of that, at $62 million,” Booker said.

Noem didn’t address the sales price at the hearing but said: “We’re purchasing centers across the country to build efficiency into our detention system.”

An ICE spokesman said that appraisals “are independently reviewed and approved by a government appraiser to establish the fair market value of the property and serves as the basis of our purchase price of the property.”

Officials inside ICE, however, tell a different story. They say the high prices were in part driven by a directive from Noem, which instructed the agency to purchase all the planned new detention sites in a 30-day span. The officials said that forced them to rush and skip steps in the acquisition process.

ICE officials say they favor the new warehouse plan because owning property—rather than leasing it like they often do now—will make it tougher for future administrations to get rid of detention space.

Many of the warehouses purchased so far will be able to hold between 1,500 and 8,500 detainees, compared with each of the more than 300 current ICE detention centers, which most often have capacity to detain several hundred people.

Warehouse sellers may be requesting prices that allow them to recover their potential losses in the property, said Arias, the property analyst. Sellers may also be seeking a premium due to the reputational risk of selling to ICE, he said.

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Some local governments say they have been blindsided by the new plans. Since the federal government doesn’t pay local property and other taxes on real estate it owns, they worry about the loss of revenue. They also fear they would have to cover the cost of improving infrastructure to support the thousands of human beings being packed into industrial warehouses.

Construction of warehouses exploded during the pandemic, boosted by pent-up demand for consumer goods and the growth of same-day delivery services from e-commerce companies like Amazon.

Since then, the market has struggled with oversupply and weaker demand. The vacancy rate for new-construction warehouses measuring between 100,000 and 500,000 square feet was sitting at a record high of 27% during the last quarter of 2025, according to CoStar. Vacancy rates for larger warehouses are also elevated.

Even though the government pays a premium price, not every developer is willing to sell. A dozen warehouse sales have fallen through, in some cases because owners or ICE pulled out after facing opposition from public officials, according to a review of public statements by local officials and warehouse owners.

That includes Hutchins, Texas, near Dallas, which was expecting a 9,000-person detention center until the warehouse owner, Majestic Realty, said last month that it wouldn’t sell to ICE, though it declined to say why.

During his confirmation hearing earlier this month, Mullin acknowledged the tax and infrastructure issues the warehouses could cause small towns and said DHS should communicate with local governments on these matters. “It’s a big impact and the community should be visited with,” Mullin said.

B.R. White, the city manager of Oakwood, Ga., where ICE recently purchased two new warehouses, said the total estimated annual tax loss to both his town and Hall County, Ga., totals about $771,000. Oakwood itself brings in about $9 million in total tax revenue a year.

“I wish it had not happened,” said White of the warehouse sale.

Oakwood also doesn’t have the sewer and water capacity for a 9,000-person detention center, said White. He said acquiring the additional sewer capacity would cost as much as $12 million.

In a February memo, the DHS said the warehouses it is purchasing already have sufficient water supply. Larger facilities would need improved wastewater capabilities, but DHS said that “there are numerous solutions which will be implemented to utilize the existing infrastructure.”

ICE didn’t respond to questions about whether it would pay for any infrastructure improvements the town might need. White, the Oakwood city manager, said he has so far been unable to get any information about the detention-center plans from ICE.

A street in Social Circle, Ga.

The government said it plans to acquire and convert more than two dozen warehouses into detention centers and processing sites.

Eric Taylor, the city manager of Social Circle, Ga., said his town faces a similar predicament. He said he hasn’t been able to get concrete answers from ICE about its plans for a detention center. PNK Group, the New York developer that sold the warehouse, said the sale to the government included “an industrial park” with the warehouse and other infrastructure.

The general funds budget of the city of Social Circle is about $8.3 million, but based on last year’s tax rates, it could lose $166,000 in property taxes due to the warehouse sale. The school system could lose another $361,000, Taylor said.

Last week, the city released a statement saying it had locked the warehouse’s water meter. “The lock is there until ICE indicates how water and sewer will be served without exceeding our limited infrastructure capacity,” the statement said.

Write to Will Parker at will.parker@wsj.com and Michelle Hackman at michelle.hackman@wsj.com