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manufacturing, health care and construction suppliers.
They also pointed to a recent flurry of deals by third-party logistics providers, a trend that’s being reflected locally in New Jersey.
Chief among them is Amazon, which took a well-documented step back in adding new fulfillment space after the pandemic, but has committed to millions of square feet this year as it refocuses on delivery times.
“A lot of companies do use Amazon as sort of a guidepost on how to handle customer service and returns and delivery efficiency,” Bryden said. “So I’m optimistic that, while we’ve seen a question in what the growth strategy is for the other big ecommerce retailers, they’re going to see that Amazon’s model since the holidays has seemed to correct and that they want a piece of that, too.”
Even so, tenants remain concerned about issues such as the availability
of power in a time when the grid is increasingly stretched, panelists said. Utilities in markets such as New Jersey and Pennsylvania have grown reluctant to commit large power loads to speculative industrial projects, adding another complication for developers that are marketing the space.
The question is especially vexing for tenants that expect their power needs
to increase in years to come, but are either unsure of the timeline or when they’ll have the capital to expand.
“It’s very challenging right now to get power to the
balanced, and it’s tricky when you look at how that works with the overall grid and what’s available today,” Bryden said.
In the meantime, Huffman emphasized the importance of “being very close to your customer, really trying to understand and investing on knowledge.”
“We do that extensively, whether
it’s through meeting with our larger customers on a regular basis,
just spending time with them and understanding what they’re thinking and what they need, or whether it’s on those smaller spaces,” she said, noting that Link’s average suite size is around 63,000 square feet.
“We have a lot of those smaller spaces, and sometimes you can spend all of your energy focused on the big guys, but really those smaller ones are what drive your occupancy and maintain your occupancy ... And I think just gathering information and investing
in those relationships is really what’s going to help all of us make stronger decisions, and that’s a big part of our strategy.” RE
Kate Nolan Bryden
administrative officer for Link Logistics Real Estate.
Bryden added that “some of our tenants anticipate going to a more automated approach in their warehouse, but don’t know exactly what that’s going to
look like, so they’re trying to ask for something forward-reaching because we’re looking for a 10-year term, not always, but I would say typically.” Occupiers must also account for any plans to electrify their fleet or provide charging stations for personal vehicles, whether by regulation or choice.
“Those are things that are being
TM 19
“There’s been a lot more 3PL activity than I recall seeing in the past couple of years,” said Kate
Nolan Bryden,
senior vice
president with
Baltimore-based
MRP Industrial
LLC. “(So) that
could be sort
of an interim
strategy for larger
companies to give themselves a little breathing room before making huge capital investments.”
The panelists cited the impact of consumer spending, which remains resilient despite some weakness in recent months, and continued demand for fast delivery. That bodes well for the types of ecommerce and retail players that led the way for industrial leasing during the COVID-19 crisis.
Sonya Huffman
customer, but it’s also challenging for the customer to communicate effectively what their needs are going to be,” said Sonya Huffman, chief
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