What are the general economics
of this compared to a one-story
warehouse?
Prologis’ research team found for every $1 spent on rent,
users of logistics real estate spend $10 on transportation
and $5 to $7 on labor. This means the physical cost of
transporting goods from faraway facilities still significantly
exceeds the cost of higher rent. In fact, we’re finding
users are increasingly willing to pay more in rent because
the location creates more value, particularly for last-mile
space.
How many types of these
facilities would you build in
a major metro area like San
Francisco or Los Angeles?
Anything else?
Our main focus is on the ever-changing needs of
our customers, and the completion of Georgetown
Crossroads is an excellent example of our commitment
to customer-centric innovation. We used our global scale
and leveraged the expertise of our colleagues in China
and Japan to optimize the building. Forward-looking
projects like Georgetown Crossroads demonstrate
our commitment to doing everything we can for our
customers and puts us closest to the consumption side
of the logistics supply chain. n
Greg Dresdow is a Senior Tax Advisor in the Real
Estate Industry Group at BPM. Contact Greg at
[email protected] or call 925-296-1088.
We redeveloped a former retail space in the Bronx, which
is now our first multistory warehouse on the East Coast.
We also have another facility pending approval in San
Francisco.
BPM Real Estate Insights 7