Real Estate Forum - October 2015

sibility to the ports are perhaps the most
important factors that are influencing
developers. While there’s no one-size-fits-
all answer to any of this, location is one
aspect that allows logistics companies to
achieve success both domestically and
internationally.”
Nick Kim, managing director at
Transwestern, tells Forum that as technol-
ogy is evolving, retailers and global compa-
nies are also changing with the times.
“Developers are building larger distribu-
tion centers—some might call them ‘mega
hubs’—to reduce the delivery time, while
clear ceiling heights are also rising. In addi-
tion, the spacing between the columns is
also widening as truck courts are becoming
longer.” He adds that developers are also
working with state and local economies
(e.g., Atlanta and Savannah, GA), to ensure
that infrastructure improvements, espe-
cially transportation (roads, rails and
bridges) are being addressed, since locat-
ing near ports and rail lines has become
more essential than ever.

As logistics has grown, the fundamentals
that have always driven activity in the indus-
trial real estate sector—location, function-
ality of properties and accessibility—are
becoming more important than ever, says
Lebovitz. “Seventy cents of every dollar is
being spent on transportation, so the acces-
sibility and location of industrial properties
is just as important as the structure and
configuration of the buildings.”
Naturally, e-commerce has created an
even stronger demand for state-of-the-art
logistically sophisticated industrial build-
ings and the labor force within them.
“E-commerce and specialized users are
increasingly looking for space and func-
tionality that will meet their needs now
and into the future,” says Lebovitz.
“Looking ahead to the third and fourth
quarters, seasonal labor in anticipation for
the holidays will be a huge factor as many
companies increase their staff to be able to
keep up with high levels of activity that are
anticipated.”
Kim says there has been a shift in indus-
trial from West Coast to East Coast.
“Shipping shifts and an increase in cargo
volume have spurred a continued increase
in leasing velocity, making improvements
in transportation imperative, especially for
when the Panama Canal expansion is com-
pleted in 2016. 3PL companies continue to
bid for the same scarce space options, and
some are being priced out.”
Jeremy Garner, a principal with
Trammell Crow Co. in the central US, tells
Forum, “As we enter the ‘new Panamax’
era for container ships, many ports now
have to invest significant capital into dredg-
ing, larger cranes, rail and other infrastruc-
ture necessary to handle such large vessels.
The challenge is compounded by the sheer
amount of cargo to be offloaded from these

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