Industrial

Kansas City Industrial Market Slated to Continue Positive Momentum in 2021

by Kristin Harlow February 11, 2021

By David Zimmer, SIOR, Newmark Zimmer The industrial real estate market in the metropolitan Kansas City area ended 2020 on a high note. 2021 will pick up right where 2020 ended, with no outward or visible signs of a slowdown. New industrial construction is visible in every geographic sector of the metro area, with upwards of 2.5 million square feet of buildings under construction. Without exception, all these are high cube, modern distribution-type facilities intended to capture the ever-growing e-commerce, logistics and food and beverage sectors of the economy. With the one possible exception being the 880,000-square-foot office and distribution building for Urban Outfitters in Wyandotte County, all industrial construction underway is on a speculative basis with lease-up taking place before the buildings are placed into service. Development activity is being sponsored by both local development entities and regional and national developers who state that Kansas City’s geographical central location, coupled with a skilled workforce and extensive transportation infrastructure, are the primary reasons why Kansas City has attracted numerous companies to establish major distribution operations over the past decade. Investor appetite In addition to new development activities, the investor market for industrial properties has also reached record levels. In one …

February 11, 2021

Industrial Market Reports New Jersey Northeast Northeast Market Reports

Demand-Build-Repeat Cycle Characterizes Southern New Jersey Industrial Market

by Taylor Williams February 8, 2021

By Scott Mertz, SIOR, president, NAI Mertz The industrial sector has proven to be the only entity with innate immunity to the coronavirus. The onset of the virus has had nary an impact on the soaring demand, rising lease rates and rapid pace of new construction in the major industrial markets throughout the nation. If anything, the increased reliance on home delivery due to stay-at-home orders has only elevated the need for well-located warehouse space from e-commerce companies. That’s been the story in Southern New Jersey, where demand remains high and inventory is in short supply. The vacancy rate has dropped below 4.5 percent, and market rent has been on a steady ascent, standing at $6.55 per square foot at the end of 2020. With more players than open seats, it’s no surprise that developers are seeking to build on any viable plot of land in the region. Construction start activity reached a crescendo in the third quarter of 2020 with 4.2 million square feet entering development. All told, there is 7.1 million square feet of new construction on the way in Southern New Jersey. Many of these facilities will be delivered to market fully occupied. Over the past five …

February 8, 2021

Industrial Market Reports Midwest Midwest Market Reports Missouri

St. Louis Market Poised to Capitalize on Industrial Demand

by Kristin Harlow January 28, 2021

By Jake Corrigan, Sansone Group As we reflect on the tumultuous year of 2020 and the COVID-19 restrictions that decimated the retail real estate sector, those of us on the industrial side of the equation are breathing a sigh of relief. While there have been small pockets of industrial users and owners that have been adversely affected, the industrial market has remained strong as a sector. We anticipate this trend to continue. Statistics continue to show the conversion of the brick-and-mortar shopper to online is on the fast track. In the last 10 years, the meteoric shift to online shopping has increased from 7 percent in 2010 to just under 25 percent at the end of 2020, according to the U.S. Census Bureau. COVID-19 has forced the otherwise reluctant online shopper to shop for goods they had never thought to have delivered to their door. As a result, online retailers have dramatically improved web-based interfacing and ease of shopping. Active development These realities have supply chain experts, third-party logistics (3PL) companies, owner/users, and of course, mega online retailers clamoring for blocks of vacant space to house their inventories. Developers active in the St. Louis metropolitan statistical area (MSA) …

January 28, 2021

Industrial Market Reports Texas Texas Market Reports

Spec Industrial Development Accelerates Throughout Texas

by Taylor Williams November 24, 2020

Industrial developers throughout the major markets of Texas are hustling to acquire and entitle land, arrange construction financing and break ground on projects to meet ever-growing requests for an increasingly diverse group of users. Accelerated demand for e-commerce and logistics services and sustained population growth ensure that new, well-located industrial spaces will be absorbed as soon as they come on line — if not before then. Developers are increasing the proportion of spec projects within their portfolios in response to this. A recent example of such a project is the 1.3 million-square-foot Fort Worth Logistics Hub, a spec project by locally based developer VanTrust Real Estate that is designed to meet rising demand from logistics users. The developer broke ground on Phase I of the project, which is located in South Fort Worth, in late October and expects to deliver a 670,941-square-foot building in July 2021. “Right now, nearly all of our projects across 10 major markets, including Dallas-Fort Worth (DFW) are being developed on speculative basis,” says Rob Huthnance, partner at California-based investment and development firm CT Realty. “As long as the level of tenant demand remains at or near where it is now, there will continue to be …

November 24, 2020

Industrial Market Reports Midwest Midwest Market Reports Nebraska

Omaha Industrial Market Dips Toe into Modern Speculative Development

by Kristin Harlow November 19, 2020

By Kevin Stratman, CCIM, SIOR, Investors Realty Like many metropolitan areas, new construction has been the recent theme in Omaha’s industrial market. Since 2015, the Omaha market has delivered almost 5 million square feet of new flex, industrial and warehouse properties. This is significant, considering the market as a whole is only about 90 million square feet. Equally impressive, the market has kept the vacancy rate below 4 percent despite all this growth. A bulk of this development has taken place in the popular Sarpy West submarket on the southwest side of the metro area along the I-80 corridor. Notwithstanding all of this construction, the market continues to have a lack of opportunities for users of all sizes. At the time of this writing, there are only 10 vacancies in existing properties for lease that are greater than 50,000 square feet. Only one of those vacancies is in a modern warehouse building. Both national and local tenants alike are shocked to find the limited number of spaces available to them. Which begs the question, why is there so little speculative construction in Omaha? Omaha has always been a more conservative economy. The market might not see the high of highs …

November 19, 2020

Features Industrial

E-Commerce Poised to Anchor Future of Industrial Real Estate

by Taylor Williams November 19, 2020

By Marc Betesh, founder and CEO of Visual Lease While the commercial real estate industry has experienced many uncertainties during the pandemic, the industrial and logistics market continues to thrive. With the rapid acceleration of e-commerce in the wake of COVID-19, major online retailers are picking up large warehousing and manufacturing spaces to keep up with the surge in demand, which is ultimately responsible for industrial real estate experiencing vacancies at historic lows in 2020. The trend of moving operations online is likely to continue at a faster pace after the pandemic subsides. Major retail companies have taken notice and are starting to capitalize on available real estate, converting square footage in malls to last-mile delivery centers and buying up spaces in logistics parks. To accommodate the increase in tenant demand, the industrial real estate market has already started to adapt. However, with all of the additional leases that have occurred in the short-term, is there still opportunity for this sector to grow? Who Are Industrial’s Biggest Winners? According to the U.S. Commerce Department, during the first half of 2020, e-commerce sales rose by 44 percent relative to that period in 2019. This rate of growth marked the highest year-over-year …

November 19, 2020

Industrial Market Reports Texas Texas Market Reports

Industrial Growth Comes Full Circle in Texas-Arkansas Border Region

by Taylor Williams October 29, 2020

By Eric Voyles, executive vice president, TexAmericas Center Years before smartphones and decades before Zoom, community leaders along the Texas-Arkansas border decided to turn a shuttered military property into a regional economic driver. Now, with the boost of a technological revolution that makes it easier than ever to connect with companies worldwide, that venture is paying major dividends. Located in the Texarkana MSA, TexAmericas Center (TAC) is an industrial park with a unique twist — it’s run by a special purpose district of the State of Texas. That means it operates like a government, controlling its own zoning and permitting processes, but it also functions like a competitive real estate development company. This combination has been particularly attractive to relocating and expanding businesses over the years and continues to drive growth for the greater Texarkana economy. Companies considering relocation or expansion at TAC frequently comment on the variety of infrastructure updates made to the industrial park. They are also quick to appreciate an impressive transportation corridor that uses multiple state highways, interstates, air freight and rail lines to disperse from a central U.S. location. But what new companies don’t always realize just how deep the supply of skilled workers is, and …

October 29, 2020

Industrial Market Reports Midwest Midwest Market Reports Missouri

Kansas City Is Key Location for Warehousing, Distribution

by Kristin Harlow October 22, 2020

By Ora Reynolds and Mike Bell, Hunt Midwest Kansas City industrial real estate is trending upward with no shortage of leasing activity. The city’s location in the heart of America, with 30 percent more interstate miles per capita running through it than any other city, offers efficiency and redundancy for global e-commerce and distribution operations. With over 270 million square feet of existing industrial space in both surface and underground business parks, ample land for new buildings, a skilled logistics workforce and robust power and fiber infrastructure, Kansas City is one of the preferred geographic locations for distribution centers and is poised for continued growth based on these strong fundamentals. The nation’s transition to online purchasing at an unprecedented pace has created ripples of change. The increase in e-commerce is driving demand for more distribution space at a rate of 1.25 million square feet for each $1 billion increase in online sales, and this demand puts an increasing pressure on the supply chain for resiliency. Americans are purchasing everything online, from food and essential supplies to clothing and gifts. In the second quarter of 2020, Americans increased their online purchasing by $211.5 billion, according to the U.S. Department of Commerce. …

October 22, 2020

Illinois Industrial Market Reports Midwest Midwest Market Reports Missouri

Missouri, Illinois Ports Collaborate to Grow Business on Inland Waterways

by Kristin Harlow October 15, 2020

By Mary Lamie, Bi-State Development The key to current and future success for four ports in Missouri and Illinois is collaboration. As ports continue to play a critical role in the global supply chain, the special working relationship between the directors of the ports in St. Louis and Kansas City is helping to keep operations flowing on the inland waterways, even in the midst of the COVID-19 pandemic. Significant investments in each port are also fueling growth at each facility. “Like many others in the freight industry, we are classified as essential. We have access to six Class I railroads, two multimodal harbors, four interstate highways and millions of square feet of warehouse space, plus manufacturing areas and developable sites,” says Dennis Wilmsmeyer, executive director of America’s Central Port (ACP), where the constant level of activity reinforces the significance of all ports as the COVID-19 pandemic continues. With its location just north of St. Louis on the Illinois bank of the Mississippi River and its many transportation and logistical advantages, ACP has attracted 80-plus commercial tenants. Its harbor operators transport more than 3 million tons of goods valued at more than $1.1 billion annually. Though the pandemic has resulted in …

October 15, 2020

Industrial Market Reports Midwest Midwest Market Reports Missouri

Demand Drives Bulk Industrial Construction in St. Louis Region’s I-70 Corridor

by Kristin Harlow October 8, 2020

By Allison Gray, Steadfast City Economic & Community Partners The growing demand for distribution space and the related importance of freight logistics and a healthy supply chain have remained steady even though the COVID-19 pandemic continues to shake up markets across the U.S. and around the globe. This demand is evident in the bi-state St. Louis region, where more inventory of bulk distribution space has been added in the five-year period between 2015 and 2019 than at any other point in St. Louis history, totaling more than 18 million square feet of top-of-the-line modern bulk space. Recent construction and development trends in the bi-state St. Louis area reveal that bulk distribution buildings — those that top 250,000 square feet — have been the highest growing sector for the regional inventory. Since 2016, 94 percent of all bulk construction has been focused along the vital I-70 corridor, while 90 percent of the new major industrial parks with significant construction are located within 10 minutes of the I-70 corridor. This corridor, which includes portions of I-170, I-270 and I-370, is a development hotspot that links Illinois and Missouri. It has emerged as a major logistics corridor supported with more than $600 million …

October 8, 2020

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