Clark Machemer, senior managing director with Crow Holdings Industrial, wrapped up this year’s I.CON event in Jersey City
By Joshua Burd
As New Jersey has shown, the industrial sector has become the new darling of commercial real estate in recent years.
That was all too clear from the sold-out crowd of more than 850 development executives and other key players who descended on this year’s I.CON event in Jersey City.
“Today, real estate is more collaborative than ever before,” said Clark Machemer, senior managing director with Crow Holdings Industrial. “We share our lessons learned and accomplishments. We look for partners who can add value to the development process. We look for ways to increase the transfer of knowledge to our clients.”
Machemer, the immediate past president of NAIOP New Jersey, addressed attendees on Friday afternoon as the two-day conference drew to a close. He highlighted several takeaways as he recapped the event, many of which could be summed up by saying: “It’s not our grandfather’s warehouse industry.”
Transportation costs, labor, supply chain efficiency and other factors now weigh heavily on decision-making by owners and tenants, he said. The asset class has attracted problem-solvers who are remediating and reviving contaminated sites to make new land. The industry is becoming more diverse.
Machemer also conceded that the logistics sector still grapples with headwinds — from truck driver shortages to soaring land costs — but said “the tailwinds are much stronger.”
“What excites me about the logistics and industrial market is what we’ve been talking about the last 48 hours: It’s vision, it’s innovation, it’s inspiration,” Machemer said. “I think those are three words that six years ago were not mentioned with industrial real estate.”
The national NAIOP event returned to Jersey City this year as part of a rotating schedule between New Jersey and Southern California. As you might expect, many of the Garden State’s top industrial developers and other key players had a significant presence this year as attendance continued to swell from recent years.
Below are excerpts from some of the New Jersey experts who took part in panel discussions during the two-day event.
William Waxman, executive vice president with CBRE, on the potential for New Jersey to serve multiple parts of the supply chain:
“The real driver of the New Jersey local market is the ‘mid-mile,’ because New Jersey is sort of a perfect storm for supply chain. Obviously the first mile comes in through Port Newark. Obviously we’re very close for last-mile deliveries. But what’s really intriguing and that nobody is really talking about is that mid-mile facility.”
Jeff Milanaik, regional partner with Bridge Development Partners, on the firm’s success in New Jersey and the ability to create value by taking on complex, environmentally challenged sites:
“Is the risk worth it? Yes, it is. Is it stressful? Yes it is. But if you want to be in last mile, this is the kind of project you need to deal with. And it’s all about the team you put together.
“I know a lot of professionals are here today supporting the organization. Many of them were part of our team. The best thing you can do is surround yourself with the best possible people that understand what it takes to do this, to keep the vision and stay constantly focused on achieving the end game.”
Gary Gabriel, executive managing director with Cushman & Wakefield, on whether large, vacant retail spaces can be converted to industrial use:
“The answer is: It depends where. In the infill, where it would be particularly interesting for folks to do that, for a lot of reasons, there’s just tons of NIMBY opposition to these types of things. So it’s very market-specific as to whether that’s available.
“If the retail happens to be located near a highway and not a lot of residential — and there won’t be a lot of trucks coming around, generally speaking — there’s a shot. But if you’re in northern Jersey, Southern California and other highly densified marketplaces, we haven’t found a lot of tolerance from the locals. They don’t want residential, they don’t want trucks.”