Industrial Development Goes Vertical

Posted on January 15, 2018

By: Jay Todisco

A prototype design demonstrates the viability of multistory distribution centers in land-constrained North American submarkets.

By now, all commercial real estate professionals are familiar with the growth of e-commerce and its impacts on every aspect of retail sales and logistics, from a product’s point of origin to the consumer’s doorstep. CRE professionals – and the buildings they design and develop – must respond to these quickly evolving market demands.

Technology has completely redefined every facet of retail commerce, but commercial real estate has not fully responded. To date, the primary solution has been to provide space for e-commerce and third-party logistics providers in well-located existing and new industrial/distribution centers. This approach has resulted in rising land and building values in many submarkets. It has also generated strong demand for industrial facilities in urban areas, where land is scarce and expensive, to support “last-mile” delivery. (See “E-commerce 2.0: Last-mile Delivery and the Rise of the Urban Warehouse,” Development, spring 2017.) The CRE industry must develop a new building type that will keep pace with the explosive growth of e-commerce. This is not a trend, but rather the next evolution of industrial building design and development. This innovative prototype will transform and reinvent how and where some new fulfillment centers are developed.

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