Page 22 - RENJ Aug2021

20 AUGUST 2021
ROUNDTABLE
BESIDES E-COMMERCE, WHAT SECTORS OR NICHES WILL DRIVE INDUSTRIAL DEVELOPMENT IN 2022?
trends can be seen in the industrial niches of cold storage warehouses and micro-fulfilment centers.
Micro-fulfillment centers — smaller, fully automated facilities adjacent
to large population centers — provide a case study in how the broader market is implementing these technological advancements. Likewise, increasing demand for cold storage to serve groceries, high-growth sectors such as life sciences and tech-based agriculture has necessitated that industrial developers embrace an increasingly tech-dependent strategy. Industrial owners and developers occupy a unique position where they monitor the technologies currently in use, but must also seek out and invest in the emerging technologies of future tenants, which Wharton continues to prioritize.
BRAD WRIGHT
CEO
CHUNKER (LEHI, UTAH)
Chunker has seen a pretty dramatic uptick in demand for industrial space across all sectors. One of the more interesting sectors, though, is construction, and its infrastructure projects like
5G nationwide
rollouts.
Many times
warehouses are
often perceived
in terms of
e-commerce and
even general
distribution, but 5G projects also require warehouse space both for the build-out, as well as the long-term maintenance of the infrastructure they are tasked with creating. Because 5G is so equipment-intensive, while also requiring multiple sites to be worked on within a given location, companies involved in this type of project need a central place to ship materials and equipment in advance of the project. They also require long-term space in order to have
the equipment on hand to service, maintain and repair the towers.
SCOTT PERKINS
VICE PRESIDENT
NAI JAMES E. HANSON (TETERBORO)
Sustained record-high demand
from e-commerce giants has placed tremendous strain on the overall industrial market throughout northern and central New Jersey. This has forced an increased number of small
to medium-sized businesses that need to access the port and related regional infrastructure to either accept high pricing or sign leases for spaces or locations that do not make sense for their businesses.
As these
businesses that
drive so much
of our regional
economic
activity look to
resume normal
operations, the
lack of spaces tailored to their needs and budgets will spur development activity throughout untapped markets such as Linden or the Interstate 80 corridor. While big-box industrial development will continue to be in high demand from all types of tenants, there is significant potential for the creation of brand-new small-bay and flex properties that are uniquely tailored
to the needs of small to medium-sized businesses in traditionally untapped industrial markets.
LARRY SCHIFFENHAUS
SENIOR VICE PRESIDENT CBRE (SADDLE BROOK)
With vacancy rates along the New Jersey Turnpike corridor hovering around 1 to 2 percent and certain submarkets nearing 0 percent, we
are not forecasting any slowdown on the development front. The growing occupier trend for new construction will continue to support new projects. More specifically, the transportation companies and retailers are continuing to play catch-up to the e-commerce players we witnessed take down several million square feet of new developments over the last two to three years. Demand is so robust for
new construction that we are
now witnessing developers hold off on marketing these projects
as the market is moving so rapidly and
having ‘deal remorse.’ It’s a real phenomenon as lease rates for new construction are moving more than $1.50 to $2 per square foot from when a developer has a shovel-ready site to
a building that’s nearing completion which is only a nine- to 12-month period. It may be a greater spread for those who have ordered their materials vs. those who have not as tenants chase certainty of delivery. This spread in rate has great financial implications to the developer RE .
BLAKE CHROMAN
PRINCIPAL
SITEX GROUP (ENGLEWOOD)
Most of the absorption in New Jersey over the last few years has clearly
come from e-commerce users, including logistics and transportation businesses
that support companies selling products
online. Aside from e-commerce, we have seen traditional retailers such as food and beverage and home furnishing companies absorb a significant amount of space as well.
Other trends we have observed:
• The logistics and transportation companies seem to be in an ‘arms race’ to secure space and build out their networks to support
anticipated/future demand.
• The need for parking — for autos, vans and trailers — seems to be more robust than ever.
• The demand for cold storage space has increased substantially.
PETER C. LEWIS
FOUNDER AND CHAIRMAN WHARTON INDUSTRIAL (NEW YORK)
While e-commerce is commonly viewed as the largest factor pushing industrial growth, its prevalence is built upon a larger
set of trends in
the industrial
market related
to technological
innovations
that are shifting
the market’s
landscape —
automation and artificial intelligence. The most illustrative examples of these
ENGINEERING | PLANNING | SURVEYING | LASER SCANNING LANDSCAPE ARCHITECTURE | STRUCTURAL | TRANSPORTATION WATER/WASTEWATER
Freehold
300 W Main Street Freehold, NJ 07728 P 732.665.5500
Cedar Knolls
54 Horsehill Road, Ste 100 Cedar Knolls, NJ 07927 P 973.359.8400
BOWMAN.COM