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The Unexpected Challenges (and Solutions) of Multilevel Warehouse Design

Costco
  • By Russ Hazzard, Jonathan Chang, Development Magazine (photo of Vancouver, B.C. Costco by Raef Grohne)

Experiences in Canada and Asia provide case studies for building these complex properties.

Over the past 15 years, multilevel warehouses — particularly those used for retail purposes — have been a growing trend across Asia and, more recently, in the United States. However, some challenges accompany their design and construction that are not encountered in the traditional approach to large-format retail. With operational criteria at the top of the list, these challenges vary heavily based on several factors, including location, footprint, environment, jurisdictional requirements, and cultural and community influences.

The increase in demand for and construction of multilevel warehouses has unearthed numerous unique considerations not present in traditional warehouse environments. These challenges — each intricate in their own right — have required creative solutions and careful programming to successfully bring each project to life.

Parking and Vehicle Flow

One of the most critical design challenges for vertical warehouses is the traffic flow of vehicles and the structure’s parking. While the goal is to keep the sales level on a single floor for ease of operations and the consumer’s shopping experience, parking for multilevel warehouses can reside either above or below grade. Both options have pros and cons: Below-grade parking requires excavation, which can increase costs and complications. However, it provides a solution for lot coverage or height restrictions in situations where those apply. Above-grade or rooftop parking is preferred as it saves both construction time and money.

Customized resolutions to optimize vehicle traffic flow and increase ease of parking have also been employed, varying from warehouse to country to country. For example, in Sinjhuang, Taiwan, indication lights for open parking spaces are used to determine capacity at a glance. In Suzhou, China, car ramps at the entrance steer customers directly up to each floor, allowing them to bypass complete levels. Larger-than-regulation parking spaces — typically very compact in Asia — are also used, granting customers peace of mind. There is no need to worry about maneuvering around tightly packed vehicles in the garage. As an added benefit, large spaces also increase vehicle flow; running in and out of an area is completed in one move vs. two or three.

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Construction Sites Build a Circular Economy

Genesis Marina

 Phase 3 Real Estate Partners’ Genesis Marina, a 550,000-square-foot life science development south of San Francisco, is the nation’s first precertified TRUE zero-waste project. Photo courtesy of Phase 3 Real Estate Partners

 

By NAIOP Development writer Alice Devine

 

Zero-waste efforts attract greater attention, including a new certification program. 

New buildings can create architecturally pleasing skylines and yet leave construction debris in their wakes. In fact, the U.S. Environmental Protection Agency estimates that construction and demolition debris accounts for more than twice the amount of generated municipal solid waste in the U.S. 

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Opportunity Zone Updates: 2020 and Beyond

Originally published NAIOP Fall 2020 Issue by Daniel Pessar.

Recent clarifications didn’t significantly change the law, but investors should be aware of these modifications.

The 2017 Tax Cuts and Jobs Act introduced tax benefits to incentivize investment in specially designated zones (Qualified Opportunity Zones, or QOZs) in all 50 states, the District of Columbia, and five U.S. territories. The Opportunity Zone laws generated buzz because, among other benefits, they allowed qualified projects held for at least 10 years to exclude capital gains upon sale.

After more than two years, it is time to consider the state of the law, the response of the investment community and some of the ways Opportunity Zone investment activity might develop in the years ahead.

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Opportunity Zones Investment Strategies Take Hold

Posted on August 14, 2019

By Rich Tucker

In an era of divided government and even more divided politics, there are still public policies that can unite the left and right. One is opportunity zones.

Opportunity zones (OZs) – defined by the IRS as economically-distressed communities where new investments, under certain conditions, may be eligible for preferential tax treatment – were added to the tax code by the Tax Cuts and Jobs Act of 2017.

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Opportunity Zones Aren't Just for Real Estate Development

Posted May 21, 2019

By Mary Burke Baker

Main Street and industries also stand to benefit from the new tax incentive.

Opportunity Zone incentives offer significant tax benefits to encourage long-term investment in low-income areas. Enacted as part of the tax reform bill that was signed into law at the end of 2017, Opportunity Zones sparked an initial wave of interest among commercial real estate developers, including those focused on affordable housing, office space and mixed use.

However, this early excitement led many in the real estate industry to overlook the fact that Opportunity Zones potentially can be used for any active trade or business. That includes manufacturing, retail, hospitality, medical practices, day care centers, research facilities, energy plants and grocery stores.

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Checking In on Opportunity Zones

Posted May 20, 2019

Lawmakers want the Treasury Department to track the effectiveness of Opportunity Zones. Last week, a bipartisan set of senators including Tim Scott (R-SC), Todd Young (R-IN), Cory Booker (D-NJ) and Maggie Hassan (D-NH) introduced S.1344, which would put in place new oversight requirements for investments in the zones. A companion bill, H.R. 2593, was introduced in the House by Democratic Rep. Ron Kind of Wisconsin.

Investors may also be given more time to invest in the zones. An aide to Sen. Scott told Bloomberg that he and Sen. Booker are considering introducing legislation that “would move back by one year the start date of the tax breaks.” Investors are facing rapidly approaching deadlines – for some, as soon as June 29 – to buy into eligible projects in order to take full advantage of the tax benefits. Pushing back the start date would buy the Treasury additional time to finalize regulations governing these investments, and provide certainty to those deploying capital in the zones.

In other legislative news, the House Ways and Means Committee plans to hold a hearing Wednesday to discuss climate change. NAIOP supports legislation that takes a sensible approach to incentivizing energy efficiency without imposing new mandates.

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IRS Delivers Clarity on Opportunity Zone Investment

Posted on April 29, 2019

Proposed regulations rolled out last week by the Treasury Department should make it easier for commercial real estate practitioners to invest in qualified Opportunity Zones (OZ).

An “Opportunity Zone” is defined as “an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.” They were created as part of the 2017 Tax Cuts and Jobs Act, which NAIOP supported.

Investors can reduce their taxes by taking capital gains income and putting it in a Qualified Opportunity Fund that invests in designated Opportunity Zones. Under the latest IRS regulations, the funds now have 12 months instead of six to put their money to work in an OZ.

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Unlocking Opportunity Zone Deals with Off-market Data

Posted on January 30, 2019

By Richard Sarkis

Opportunity Zones are here, and the commercial real estate industry is paying close attention. Established as part of the Tax Cuts and Jobs Act in 2017, the new government program is designed to stimulate struggling economies across the nation. Handpicked for specific economic criteria, over 8,700 designated census tracts are attracting investors and developers of all kinds for their tax breaks on capital gains.

While the benefits for investment are clear, many commercial real estate professionals are a little less clear on how to start their search. How, exactly, can investors efficiently locate and analyze these assets for investment? The answer lies in off-market data. As more players enter the Opportunity Zone market, off-market data and commercial real estate technology provide a simplified search experience to find prized properties before others do and empower stronger deal-making across the country’s most lucrative markets, in areas such as Chicago, Los Angeles and Miami.

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CRE Must-Reads

Posted on January 21, 2019

  • Debunking The Three Myths Of Commercial Real Estate Technology - Forbes (Jan. 2, 2019) Read more
  • Google's Take on Co-Working and Sharing Spaces - GlobeSt.com – Subscription required (Jan. 7, 2019) Read more
  • In 2069, Your Food Will Shop for You - Medium (Jan. 3, 2019) Read more
  • Opportunity Zones: Navigating A Path to Investment - Newmark Knight Frank (December 2018) Read more
  • The surge in online-shopping returns has boosted the warehouse sector - CNBC (Jan. 4, 2019) Read more
  • Why developers are offering 'experiences' to attract suburbanites - Washington Post (Jan. 3, 2019) Read more
  • The Year Ahead: Down But Not Out - GlobeSt.com – Subscription required (Jan. 7, 2019) Read more