Industrial Innovation—Prologis
By Greg Dresdow
Recently, we had the privilege of asking Dan Letter, President
of Central Region, Prologis, about the company’s new
innovative facility near downtown Seattle. Prologis is the
global leader in logistics real estate. The company recently
completed the first multistory logistics facility in the U.S.
What led to this development? Here is what Dan had to say.
Tell us a little bit about your
warehouse innovation in Seattle.
Prologis’ Georgetown Crossroads is the first multistory
logistics facility in the United States. Located near downtown
Seattle, this three-story distribution center recognizes the
need for companies to be ever closer to their customers
without compromising the functional attributes of a fulfillment
center. It features truck ramps leading to loading docks on the
second level and the third floor, served via forklift accessible
freight elevators, for lighter-scale warehouse operations.
What led to developing this concept/
project? What is driving this trend?
The traditional warehouse was once a cavernous building,
tucked away in a second-tier city and seen simply as a means
of storing goods. However, today’s robust e-commerce-driven
economy has created a significant shift in how logistics real
estate is viewed. Same-day delivery is evolving into same-
hour delivery in some places, and consumers are insisting
on a broader selection and availability of goods. As a result,
selecting a market and a property are now business-critical
decisions that favor high-quality space in prime locations
near urban centers.
E-commerce comprises about 20% of new leasing for
logistics real estate, up from less than 5% five years ago. One
reason for this growth is online retailers need approximately
1.2 million square feet per billion dollars of online sales on
average, which is three times the distribution center space
required for traditional brick-and-mortar retailers.
How difficult was it to get approved
by the local government?
We partnered with the City of Seattle and King County
throughout the two-year entitlement process to make the
vision of the first multistory warehouse in the U.S. a reality.
One of the challenges is this type of property hadn’t been
developed before. So, we worked closely with city officials
before construction began to study the development and to
correctly interpret building codes.
Where will we see this concept
replicated in the U.S.? Will this
type of development only occur
in major urban areas or perhaps
in a distribution hub area like
Sacramento?
We believe multistory facilities will be attractive in dense
urban markets where industrial real estate is in short supply
and property values are at a premium. In the U.S., we see this
in the five or six most densely populated markets.
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BPM Real Estate Insights
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