Page 15 - RENJ Aug2021
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 that leave more room for surface parking.
“Owners are becoming more
diligent not to overbuild sites,”
he said. “They’re accommodating
now for these tremendous parking requirements and they’re not your historic 53-foot trailer parking, per se. They’re all different sizes of vehicles — it could be sprinter vans, it could be box trucks and it could be everything in between. And it could be car parking as well.”
In some cases, developers are providing a solution by going vertical. At its Sunset Industrial Park in Brooklyn, Bridge is developing a roughly 90,000-square-foot building for FedEx that will feature rooftop parking, Milanaik said. It’s now exploring a similar concept at infill sites in northern New Jersey, which would comprise a conventional warehouse on the ground floor with the ability to park a fleet of vans or box trucks on the upper level.
Tenants with delivery fleets have
also turned to leasing parking lots, regardless of whether there is a functional warehouse on the parcel. That has provided another opportunity for the likes of Prologis, which has acquired more than a dozen properties over the past two years in New Jersey, New York and the Philadelphia area that are either completely vacant or have small buildings relative to their overall surface areas.
Those include assets such as 520 Belleville Turnpike in Kearny,
which totals eight acres with just a 12,500-square-foot on the property. The balance of the site provides the potential for 138 trailer spaces or 478 van spaces, along with 84 spots for cars.
“There really is value in parking these days and it’s hard to get, so we’ve really been focused on those types of acquisitions recently in Philadelphia, New Jersey and New York,” said Jesse Harty, a Prologis senior vice president and market officer for New Jersey and New York. He noted that, as recently as two years ago, parking lots or low-coverage sites would have been prime candidates for redevelopment by industrial builders, but the demand for fleet parking and the lack of supply have made it increasingly profitable to keep them as is.
“Parking lot rents have catapulted in last 18 months,” Harty said, adding that
they’ve increased by some 60 percent in New Jersey to around $25,000 per month per acre. Rates in the outer boroughs are still nearly triple that amount and up to 10 times as much in Manhattan, he added, so “there is still value and rent growth in New Jersey.”
Milanaik has also seen parking requirements grow at more sprawling sites such as Bridge Point 78, a new industrial park in Phillipsburg and Lopatcong that is slated to include up to 4 million square feet. The firm is now constructing a fifth building on the site, where plans also call for a sixth, but
a user recently inquired about using
the final parcel for trailer and regional truck parking instead, he said.
Bridge Industrial had long considered that as a possibility as it has been building out the site along Route 22, Milanaik said.
Knee expects that to become more common at large, master-planned industrial campuses. With the ability to monetize the additional parking and the potential savings from not erecting another building, it becomes a worthwhile consideration for developers.
“In some instances they’re actually
doing better because they don’t have the vertical risk of actually building something,” he said, although landlords also must consider the downside. For instance, a fully developed building may provide a greater opportunity for rent growth in subsequent years than a parking lot would.
Still, the possibility creates another reason for developers to build the sites in phases, which they are typically doing anyway based on the available infrastructure or with the aim of managing their risk.
“We see it on some of our projects,
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