Page 16 - RENJ Aug2021

14 AUGUST 2021
Jesse Harty, a Prologis senior vice president and market officer for New Jersey and New York, said the company has acquired more than a dozen parking lots or low-coverage industrial sites over the past two years in New Jersey, New York and the Philadelphia area, with a focus on meeting the growing need for parking from tenants.
where the owners are willing to pivot and not build the building, but they’re going to get compensated for it,” Knee said.
Much like the still-surging rental rates in the industrial sector, parking revenue will loom large in helping developers underwrite the ever-growing cost
of land, Knee said. He added that,
as demand has soared, institutional investors have grown wise to the value of parking in markets such as North Jersey — and the potential revenue stream that comes with it.
“Even in the underwriting today, sellers are getting paid for parking
on the sale,” Knee said. “And then the new owners and new investors are certainly underwriting that to make sure they capture that revenue because ... deals are very thin,
cap rates are down (and) there’s a tremendous amount of money chasing very few deals, so people
have to make sure that they don’t miss any revenue opportunities.”
Institutional investors have also turned their focus to pure parking sites in dense, infill markets such as Port Newark-
Elizabeth, said
Alex Kachris,
a research
manager with
JLL. That’s due
in large part to
the flight of large,
multinational
tenants to the
properties, a far cry from the locally based trucking firms and other noncredit tenants that rented the lots in past decades.
“Fast-forward to today, when all of these e-commerce and big retailers are in the market looking to park their fleets, it’s really revolutionized the entire sector,” Kachris said. “So with that, the big capital is pushing right behind it ... and it’s also caused an increase in value for these sites, not only because the rents are higher but because the cap rates have compressed.” RE
Alex Kachris
A NEW TWIST ON TRAFFIC CONCERNS
The growing number of delivery centers in northern New Jersey may be smaller
than the sprawling, big-box warehouses that have become common in recent years, but that doesn’t mean they are always welcomed by local residents.
Bridge Industrial’s Jeff Milanaik points to the large fleets of vans and midsized delivery trucks that are typically shuttling to and from the sites.
“It’s always been traffic every time we’ve done anything going back decades,” said Milanaik, Bridge’s Northeast region partner, referring to the concerns of municipal leaders. “The bigger buildings certainly attract more attention for truck traffic and the impact on the surrounding region, but also when you do the smaller delivery-type buildings, it’s
the same conversation but a different focus, because they tend to be more urban, smaller
areas that are more congested, and you could be dealing with a (fleet of) couple hundred.”
Still, many delivery centers have a key
differenti-
ator. Dan
Disario, a
Lawrencev-
ille-based
principal
and traffic
consultant
with Lan-
gan, said the facilities typically don’t begin operations until 9 a.m., in an effort to avoid the morning rush hour.
“I would characterize a delivery station as a very compatible land use no matter its location, because in those typical commute times when volumes on the streets are their highest, the delivery stations are relatively low-activity,” Disario said. “So having their highest activity occur late morning by and large fits very well if not for all sites, almost all sites, for that reason.”
Dan Disario
ARCHITECTURE INTERIORS PLANNING REGULATORY APPROVALS
www.posen.com
Courtesy: Prologis