Commercial Investment Real Estate September/October 2013 - Page 33

T operations. Many companies and industries downsized and gave space back. Active expansions were put on hold or canceled. T e only silver lining for the industrial market — especially developers — was the accelerating trend to consolidate supply chain operations into very large distribution space. T is gave rise to the super-bulk distribution centers: modern logistics facilities from 600,000 square feet to more than 1 million sf. As demand for small buildings declined dramatically, demand for very large spaces held fairly strong as tenants insisted on increased supply chain ef ciency. T e big buildings f lled up, of en at market rates higher than smaller spaces. Large build-to-suits were able to capture even higher rents per square foot in many markets. With the relatively short development cycle, some developers were able to react quickly to a volatile market and changing customer demands. For real estate companies with class A space and readily available land and capital, this created a market advantage. 31