Commercial Investment Real Estate September/October 2013 - Page 33
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.