Commercial Investment Real Estate May/June 2019 | Page 12

MARKET
FORECAST
Choosing Wisely
Warehouse site selection is responding to consumer demands
on the supply chain.
by Jimmy Glascock
Bigger, Better, More
The central warehousing question has changed from “what can
I fit in this space?” to “what space can fit my needs?” Million-
square-foot facilities used to be unusual, but they’ve become
something of a norm as companies grow, fueled in part by the
rise of e-commerce and new logistics technologies. Still, smaller
warehouses are in demand from e-commerce retailers looking
for smaller footprints near major metropolitan areas to minimize
delivery times.
While walls in newer warehouse buildings are placed farther
out to accommodate additional rows and racks, other limita-
tions — namely, roofs and floors — are also receiving makeovers.
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May | June 2019
Super-flat, level floors are invaluable to busy shippers, because
they can handle stable stacking and towering racks, particularly
when paired with higher roof lines that are also becoming more
common. If companies know where to look or which third-party
logistics company to partner with to do the legwork for them,
no modern business needs to make do with an ill-fitting space.
Technology also plays a starring role in determining appro-
priate warehouse layouts and capabilities. The power needed
for automated pickers, robotics, and other pick/pack equipment
could easily overload the output abilities of an older facility. Addi-
tionally, a good warehouse fit isn’t just about size and power
anymore; it’s about having adequate HVAC for employees, and
racks and refrigeration setups for product stability. Cold chain
demands have grown in the health care, food, and beverage sec-
tors. With ever-increasing regulations bearing down on all three,
monitoring and ensuring a consistent temperature are crucial to
product freshness, quality, and safety.
The New Place to Be
Along with products and warehousing needs, logistics trans-
port is changing as well. Electric transport vehicles, while not
COMMERCIAL INVESTMENT REAL ESTATE
T
he industrial real estate market is booming and
changing rapidly; economic factors and technological
advancements are reshaping the way warehouses are
built and rented. Consumer demands and sociopolitical
factors are also influencing supply chains and logistics real estate.
Steel tariffs, for example, can impact construction costs, while
freeway congestion and rent increases can spell trouble for those
in the industry.