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An affiliate of Vecellio Group plans to redevelop its construction materials site near West Palm Beach to build distribution warehouses.

The Palm Beach County Zoning Commission will consider several applications for the 32.8-acre site at 101 Sansburys Way on Feb. 4. The property, owned by Vecellio Group subsidiary 101 Sansburys Way LLC, currently has about 66,000 square feet of warehouses and storage yards for the company’s construction equipment. It’s on the north side of Southern Boulevard, just west of Florida’s Turnpike.

(IMAGE CREDIT: HELMS DEVELOPMENT)

The applicant wants to rezone the southern portion of the property from “commercial” to “industrial” and have a site plan approved for three warehouses totaling 435,800 square feet. There would be 535 parking spaces and 130 loading spaces.

Scott Helms, of Fort Lauderdale-based Helms Development, represents Vecellio Group as the development partner of the project.

 

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Long before the novel coronavirus pandemic sent Americans racing for their smartphones to order groceries, industrial real estate observers were keeping a close eye on the availability of temperature-controlled warehouses.

Covid-19 vaccines that require very specific temperatures — Moderna Inc.’s vaccine requires temperatures of minus-20 degrees Celsius and Pfizer Inc.’s candidate requires storage at minus-70 degrees Celsius — have put cold-storage warehouses in the spotlight in recent weeks.

But the sector has seen little vacancy for years, and industrial real estate experts don’t expect that to change as consumers shift more of their food shopping online, even after the pandemic is in the past.

Historically, the national vacancy rate of cold-storage warehouses has hovered below 10%, according to JLL, and much of that inventory is aging and rapidly approaching functional obsolescence. The average cold-storage warehouse in the U.S. is 42 years old, according to JLL.

“If we have a client who wants to know all the available temperature-controlled storage in the U.S. … on any given day, this isn’t something that takes up 10 pages,” said Tray Anderson, Cushman & Wakefield Inc.’s logistics and industrial lead for the Americas. “It’s more like two or three.”

The lack of available space is a function of economics: Temperature-controlled warehouses cost nearly twice as much to build as their dry-storage counterparts, according to JLL, which forecasts that those construction costs will only rise as demand intensifies. A temperature-controlled warehouse can cost $130 to $180 a square foot, whereas construction costs for a conventional warehouse range from $70to $90 a square foot.

“That pricing makes speculative construction — breaking ground without a signed tenant in place — difficult but not impossible,” said Anderson, who is based in North Carolina.

But the uptick in demand from food companies and retailers — coupled with the variable of a massive vaccine-distribution effort — is enough to embolden some developers to try their hand at speculative construction. Already, 95% of U.S. food goes through a third-party distribution center before it reaches consumers, according to CBRE Group Inc. And as early as May 2019, CBRE predicted that the country needed an additional 75 million to 100 million square feet of cold-storage space to meet demand for direct-to-consumer food orders — and that was before the pandemic threw online ordering of everything from furniture to food into overdrive.

“JLL is tracking more than 20 speculative cold-storage developments,” said Dustin Volz, a managing director on JLL’s capital markets team who specializes in such properties.

Cold-storage properties tend to be specific to individual users, but Anderson said projects could at least begin construction by pouring a floor that can handle a specific temperature.

“Speculative cold storage is still challenging, but a few select developers are figuring it out,” said Volz, who is based in Dallas.

Vaccines for the novel coronavirus aren’t expected to drive much additional supply for cold storage because the goal will be to administer the vaccines quickly. What that might do for short-term demand for space is another matter.

“The growth we’re talking about isn’t really vaccine-related; it’s food,” Anderson said. “Especially at minus-20 degrees … Minus 20 is much more common with pharma and food. You can find space that can do minus 20. You’re not going to find any vacant space at minus 80.”

Volz agreed that food is driving the majority of the demand — and that the pandemic highlighted weaknesses in the U.S. food supply chain, such as its reliance on international vendors and inability to handle sudden upticks in demand.

“The need for excess warehouse space is therefore a result of keeping additional inventory to handle any surges in food demand,” Volz said, “and maintaining a domestic supply chain with the unrestrained geographical access for the population with supplemental food imports to complement the new infrastructure.”

 

Source: SFBJ

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First Industrial Realty Trust continues to bet big on South Florida’s industrial market, this time with a warehouse proposal in Margate.

First Industrial Realty Trust wants to build FirstGate Commerce Center in Margate.
(IMAGE CREDIT: RLC ARCHITECTS)

The city’s Development Review Committee will consider the site plan for FirstGate Commerce Center on Nov. 10. The 9.3-acre property is at the northwest corner of Copans Road and Banks Road.

FR5355 Northwest 24th Street LLC, an affiliate of Chicago-based First Industrial Realty Trust, acquired the vacant site from AutoNation for $8.6 million in late 2019.

The site plan calls for a 131,680-square-foot warehouse with a 32-foot clear height, surrounded by 186 parking spaces.

Chris Willson, senior regional director at First Industrial, couldn’t be reached for comment. The developer is working with RLC Architects and Sun-Tech Engineering on the project.

There’s been strong demand for industrial space during the Covid-19 pandemic as the sectors of e-commerce and trade grow. First Industrial also has a large warehouse project in neighboring Pompano Beach.

 

Source: SFBJ

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First Industrial Realty Trust aims to build two distribution warehouses in Pompano Beach, which has seen a flurry of industrial development recently.

The city’s Planning and Zoning Board will consider the plat application for the 19.4-acre site at 1001 and 1021 N.W. 12th Terrace on Oct. 28. It’s just west of Interstate 95.

FR NW 12 Terrace LLC, part of Chicago-based First Industrial Realty Trust (NYSE: FR), acquired the property for $19.8 million in 2019. It currently has 31,467 square feet of industrial buildings, which would be demolished.

The plat calls for two distribution warehouses totaling up to 500,000 square feet. It would be an expansion of First 95 Distribution Center, which will be delivered in early 2021 with 141,450 square feet.

Officials with planning firm Keith, which represents First Industrial in the application, declined comment.

Other pending industrial projects in Pompano Beach include the addition of industrial space to the redevelopment of the Isle Casino and an Amazon.com delivery station near Florida’s Turnpike. There’s been strong demand for space from e-commerce distributors during the Covid-19 pandemic as more people shop online.

boynton beach mall

What is going to happen to America’s dead malls? That’s a million-dollar question plaguing retailers and real estate developers.

With a report circulating earlier this month that the biggest U.S. mall owner Simon Property Group has been in talks with Amazon to convert some shuttered Sears and J.C. Penney department stores into fulfillment centers, many industry analysts have been pontificating on the future of malls as logistics hubs.

The consensus seems to be that turning old retail space into new warehouses might not be so easy, even though it might seem like a logical solution. Demand for logistics buildings is skyrocketing as e-commerce sales balloon. But the hurdles include the need to have properties rezoned, which could be met with pushback from local municipalities.

“Just because retail space has gone vacant or remained fallow does not mean that it is automatically a good candidate for repurposing into industrial space,” the head of Moody’s Analytics commercial real estate economics division, Victor Calanog, said in a report just released. “One cannot simply build industrial buildings in areas zoned for commercial use. Often, that requires rezoning areas — a long and tedious process with a low probability of success. State and local governments typically tax industrial properties at anywhere from half to two-thirds the rate of commercial properties, so municipalities have little incentive to rezone areas from commercial to industrial use, as they will collect less tax revenues.”

Demand for various commercial real estate asset types is expected to shift noticeably because of the coronavirus pandemic, with more people now working from home, flocking to the suburbs for space and buying online things they used to browse for in stores.

According to data pulled by Moody’s Analytics REIS, apartment development in the U.S. is expected to be down 15.6% in a post-Covid-19 world. Office development is set to drop 10%, it said, while retail falls 15.7%. Industrial development, meantime, is expected to pick up 3.6%.

The firm did find five markets where it said it would make the most sense to covert vacant retail space into warehouse space, based on where retail has been underperforming and where warehouse demand is hot. Those are: Central New Jersey, Northern New Jersey, Long Island, Memphis and Detroit.

But shopping malls are likely going to be shuttering in suburbs all across the country, as store closures grow in number and landlords capitulate. Another new report out this week from Coresight Research estimates 25% of America’s roughly 1,000 malls will close over the next three to five years, with the pandemic accelerating a demise that was already underway before the new virus emerged.

The malls most at risk of going dark are classified as so-called B-, C- and D-rated malls, meaning they bring in fewer sales per square foot than an A mall. An A++ mall could bring in as much as $1,000 in sales per square foot, for example, while a C+ mall does about $320. There are roughly 380 C- and D-rated malls in the U.S., according to an analysis by the commercial real estate firm Green Street Advisors. It has said malls rated C and below “are not viable retail centers long term.”

CBL & Associates, a Tennessee-based mall owner that has a number of B- and C-rated malls in its portfolio, has said it plans to file for bankruptcy by Oct. 1, highlighting just how much pressure these landlords are facing. Even high-end malls are under pressure, though. No one is really immune. An upscale mall owner in Miami, Bal Harbour Shops, is currently moving to evict the luxury department store chain Saks Fifth Avenue for not paying rent since mid-March. It owes Bal Harbour roughly $1.9 million, according to court documents.

“Despite being given months to honor its past due rental obligations and despite Saks’ impressive post-COVID sales at Bal Harbour Shops, Saks steadfastly refused to make any effort to pay any part of its rent,” Bal Harbour Shops President and Chief Executive Matthew Whitman Lazenby said in a statement. “Bal Harbour Shops has worked tirelessly to ensure our business and our tenants can survive and thrive in this environment. Regrettably, this injudicious behavior has left us with no other option than to terminate the Saks lease and sue to evict Saks from Bal Harbour Shops.”

A representative from Hudson’s Bay-owned Saks was not immediately available to comment.

About 90% of occupants in U.S. malls are either experiential tenants like movie theaters, or department store chains and apparel retailers, according to the Coresight analysis. This makes malls the most vulnerable type of shopping centers to the Covid-19 impact, it said, compared with other properties like strip centers that have grocery stores and outlet centers that offer consumers bargains.

During the pandemic, movie theaters and clothing shops have faced long windows of being closed, while consumers could still flock to strip centers for food, cleaning products and other essentials. In some states, such as New York and California, movie theaters remain closed to this day. And so with minimal revenue coming in, these are the businesses that are most likely requesting rent reductions, or not paying rent at all.

Mall developers had up until now been courting entertainment companies like Dave & Buster’s and iFly indoor skydiving, and restaurants like Cheesecake Factory, to lessen their dependence on shrinking retailers. But those businesses have also not fared well in an age of social distancing.

So, if not warehouses and entertainment complexes, analysts have pondered other potential use cases for so-called dead malls: Churches, medical facilities, office spaces and even apartment complexes.

But even office space is a risky bet now, as the working-from-home trend could become permanent for some. Workers in JPMorgan Chase’s corporate and investment bank, for example, will cycle between days spent at the office and at home, keeping the ability to work remotely on a part-time basis. The world’s biggest Wall Street bank by revenue has said it could shutter backup trading floors located outside New York and London as a result of the move.

The outdoor retailer REI is also looking to sell its recently completed corporate campus in suburban Seattle, shifting instead to more satellite offices, as a result of the pandemic.

“Unfortunately, this whole Covid thing has thrown the experiential pitch out the window,” Moody’s Calanog said in a phone interview. “Until we resolve this pandemic, I suspect we are going to be in a holding pattern with hollow retail space. Then we will see what the most viable format is.”

View the CNBC news video ‘How Shrinking the American Mall Will Impact Local Tax Revenue‘ below.

Source: CNBC

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Industrial prices could set to increase as a result of increased activity and rents during the pandemic.

According to a recent survey from RCM/LightBox, industrial players expect rents to increase from 4% to 7%. The asset class has already proven to be resilient during the worst months of the pandemic. As a result, many investors have flocked to the asset class.

“Experts in the industry—brokers, investors and developers—shared with us their expectations that by the end of the year we’d see pricing and rents increasing from 4-7 percent. Those expectations were expressed for many primary and a number of secondary markets, in key population areas, across the country,” Tina Lichens, SVP of broker operations at LightBox, tells GlobeSt.com.

Not all industrial assets are created equal. Manufacturing, for example, has not performed well during the pandemic. Investors as focused on ecommerce-related uses, pharmaceutical-related uses and any industrial supporting essential uses.

“Among the industrial properties to watch are those tied to consumer goods, pharmaceuticals, and other essential services, along with last mile facilities that support growing population bases with quick delivery options,” says Lichens. “Not to be overlooked are mission critical facilities, such as data centers and corporate food products facilities. Data centers, for example, have become increasingly important because so many people are working from home.”

Manufacturing and outdated industrial—which could pose a higher risk in a down market—are the least popular.

“Those subcategories that face the greatest exposure could be older, obsolete facilities along with smaller multi-tenant facilities, particularly those not in strong and established metro corridors,” says Lichens. “Given some of the uncertainties that exist in the overall economy, particularly for small businesses, it may be difficult to underwrite the acquisition of these facilities without predictable cash flow.”

The increased demand for ecommerce and the expectation of increased pricing has created enthusiasm for the asset class, but Lichens says that there is no reason to think that investors are being overly positive.

“Various reports point to growing consumer demand for online shopping and significant increases in store and online activity from Target, Walmart and others. Even before the pandemic, the experts pointed to the increase in ecommerce activity as reason to be bullish on the industrial market,” Lichens says. “The pandemic has truly emphasized our reliance on ecommerce and caused certain areas to experience tremendous growth. With more people in the U.S. accustom to and now embracing ecommerce, it has become a new way of life that has changed our entire consumer culture. It is difficult to envision a shift in the other direction.”

 

Source: GlobeSt.

As shopping centre and high street landlords survey the wreckage left by coronavirus, warehouse owners are facing a different problem: how to deal with record demand.

The pandemic has pushed more consumers online, prompting a rush for warehouse space, from small “last-mile” delivery sites near city centres to cavernous “big-box” distribution centres

Amazon has led the charge. The company, which has added an eye-watering $600bn to its market capitalisation this year as sales have jumped, is inking lease agreements on mammoth warehouses around the world. It has committed to opening 33 “fulfilment centres” in the US this year, an additional 35m square feet spread from Atlanta to Arizona.

The US ecommerce giant is also the incoming tenant of a 2.3m square foot warehouse on London’s outskirts, according to people with knowledge of that deal. Amazon’s sprawling expansion is one reason why investors are sensing opportunity.

The take-up of UK logistics space hit record levels in the second quarter of the year, according to property group CBRE — despite the lockdown.

“Following a quiet few months after coronavirus hit, investors are back with a vengeance”, said David Sleath, chief executive of Segro, the dominant logistics company in the UK and a sizeable participant in Europe which last week said it had lifted first-half profit. “If you are a global institutional investor and you want exposure to commercial real estate, this is an attractive place to be.”

A decade ago, ecommerce accounted for 6.7 per cent of all retail sales in the UK, according to the Office for National Statistics. By February, the month before the outbreak, the figure was 19 per cent. By May it had hit 33 per cent. In April, 27 per cent of purchases were made online in the US, according to the commerce department and Bank of America.

Until recently, the most desirable property to own was a traditional mall. Malls had a natural moat, being difficult to develop and serving a catchment area

“That share was likely to diminish as stores reopened,” cautioned Mr Sleath, “but incoming tenants were looking to crystallise that temporary spike into increased capacity”.

“There’s a wall of cash coming into our sector,” said Marcus de Minckwitz, an investment adviser on European logistics at Savills property.

Every extra £1bn spent online means the addition of almost 900,000 square feet of logistics space, according to CBRE. New York-listed Prologis, the world’s largest warehouse company, estimates that 1.2m sq ft of space is needed for every $1bn in ecommerce sales in the US.

Gains from ecommerce tenants far outweigh the losses from bricks-and-mortar retailers, according to CBRE, one reason why Blackstone, the world’s largest private property owner, has described logistics as its “highest conviction” sector.

“Until recently, the most desirable property to own was a traditional mall. Malls had a natural moat, being difficult to develop and serving a catchment area . . . Logistics for a long time was viewed as the other end of the spectrum: not so exciting and more easily replicable,” said Ken Caplan, global co-head of Blackstone Real Estate. The rise of ecommerce had shifted that whole dynamic.”

In June 2010, Segro’s market capitalisation was less than £2bn, according to data from S&P Global. Now at £11.8bn, it is comfortably the UK’s largest listed property group; UK shopping centre owner Intu, meanwhile, has collapsed. The value of US peer Prologis has climbed a fifth this year to roughly $77.5bn.

Dozens of shopping centres in the US are being turned into industrial sites, according to CBRE, which says Covid-19 will accelerate the trend. This week, the Wall Street Journal reported that Amazon was in talks with mall owner Simon Property to repurpose department stores as distribution hubs.

Thanks to the ecommerce boom, CBRE predicts there will be demand for 333m sq ft of new space in the US by 2022 — treble its previous estimate — and expects rents to grow by about 6 per cent a year. Amazon is not the only eager tenant. Fashion retailers with a limited online presence have desperately sought space to park stock they could not shift in the pandemic.

“They already have warehouses full of clothes, then next season’s come in and they can’t stack it,” according to one UK property agent.

“But while some warehouse owners had suffered hits to rental income from retail tenants in particular, investors bidding for new sites were achieving few discounts,” said Mr de Minckwitz.

“Some indiscriminate investors were likely to get caught out, warned Mr Sleath. “There will be more retail fatalities, that will mean empty warehousing as well as shopping centres. It’s very important to think about where you place your money.”

Asset manager PGIM bought five German logistics sites last month and said it was optimistic that demand would only grow. Private equity firms are piling in too: as well as Blackstone, Meyer Bergman plans to raise €750m to invest in Europe.

“Investors needing long and strong sources of income, such as sovereign wealth funds and European pension funds, were also attracted by the sector,” said James Dunlop, a fund manager at Tritax Big Box.

“But some might come unstuck,” cautioned Adrian Benedict, head of real estate solutions at Fidelity. “There’s a flood of capital from retail to logistics. Inevitably, with every crisis, you see those poorly considered deals at the end of the cycle are the ones you really regret.”

 

 

Source: SFBJ

boynton beach mall

Boynton Beach Mall could have half the square footage for retail businesses once it’s redeveloped, but it might add apartments, a hotel and offices.

The plans reflect attempts across America to transform malls as fewer people go there to shop. Apartments also are planned at the Coral Square Mall in Coral Springs and at the former Fashion Mall in Plantation.

The Boynton Beach Mall once had tenants including Burdines, JCPenney, Jordan Marsh and Lord & Taylor. But like other malls facing less in-store shopping and an increase in online shopping by consumers, retail tenants have dwindled over the years, with new types of tenants coming in.

“According to city documents, 30 percent of the mall is now vacant, and its proposed redevelopment would not only stabilize it, but make it a desirable destination once again,” said Bonnie Miskel, a lawyer representing primary mall owner Washington Prime.

The proposal would reduce the existing mall square footage for retail from about 1 million square feet to 482,750 square feet, and build separate, mixed-use buildings with retail use on the first floor and residential units above. Developers also would add up to 1,420 residential apartments on the site, along the north end and southwest side of the mall property, and inside the new mixed-use buildings. The redeveloped mall would include a 400-room hotel, 65,000 square feet each of medical office space, and general office space, and 35,000 of new restaurant space.

The master plan and rezoning request for the 116-acre site was filed with the Boynton Beach City Commission, which gave initial approval, but meets again on the plans Jan. 21. Some Boynton Beach residents expressed concerns on the NextDoor app about mounting traffic off Congress Avenue near the mall and that mall redevelopment plans didn’t seem to include any new entertainment venues for the community, such as a park, bowling alley or sports center.

The plan doesn’t affect Macy’s and JCPenney, the two major department stores remaining at the mall, which are owned separately, and Christ Fellowship Church, owner of a former Dillard’s department store space in the mall. The redevelopment would happen over five phases, with the first phase removing the former Sears buildings and adding a 400-unit apartment building, Washington Prime said.

In its proposal for redevelopment, Washington Prime says that “the current use of the property as an aging mall is in steady decline as it no longer meets the needs of the community and is slowly becoming a source of blight in the city.” Occupancy at the mall has dropped by 11.5 percent between 2015 and 2016, according to documents submitted to the city to justify rezoning.

 

Source: Sun-Sentinel

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Prolific industrial builder Bridge Development Partners LLC purchased 34 vacant acres for $36.9 million to build a three-building center in Davie.

Bridge Point 595 will be southwest of Interstate 595 and Florida’s Turnpike. The 677,314-square-foot industrial park is set to open in the third quarter 2020. Two buildings will measure 290,295 square feet each and the third will be 96,724 square feet.

Chicago-based Bridge Development bought the land from Forman Industrial Land LLC, an affiliate of the Forman family whose late patriarch Hamilton Forman was a prominent South Florida landowner who ventured into real estate projects.

Bridge Point 595 speaks to the healthy South Florida industrial market, which has some of the lowest vacancy rates among all asset classes. Population growth, e-commerce and the scarcity of large parcels are boosting the sector. That’s heightened interest from institutional investors, which have been scooping up properties and encouraged merchant builders who build to sell.

Bridge’s construction spree since 2012 added 2 million square feet in Miami-Dade and Broward counties. Bridge recently sold its 221,815-square-foot Bridge Point Riverbend west of Interstate 95 in Fort Lauderdale to institutional investor ASB Capital Management LLC for $38.2 million.

Its other projects include Bridge Point Commerce Center, a mammoth industrial project on 185 acres southwest of Florida’s Turnpike Extension and Northwest 47th Avenue in Miami Gardens. The 1.1 million-square-foot first phase will be finished by month’s end. Future phases will take the total size to 2.1 million square feet.

 

Source: DBR

South Florida officials have a message for Amazon and Jeff Bezos: Baby come back.

The Washington Post just reported that Amazon is reconsidering its decision to award New York City part of its HQ2 project, which the company has said would come with 25,000 jobs and billions in local investment. Amazon is facing what the Post calls a wave of opposition from local elected officials about the prospect of giving financial subsidies to the world’s most valuable company. Amazon has not yet leased any land there, the Post reported.

Miami-Dade Mayor Carlos Gimenez says he hasn’t heard from Amazon since the e-commerce giant broke the news to him and other South Florida officials that the region came up short in its bid to land HQ2. Miami’s bid, jointly submitted with Broward and Palm Beach counties, did land the region on a short-list of 20 finalists.

In a statement, Gimenez said he is ready to start things up again whenever Amazon is.

“If Amazon is reconsidering getting out of its plan to open a headquarters in New York, as has been reported by the Washington Post, we welcome the opportunity to talk further with the e-commerce giant,” Mayor Gimenez said.

A spokesperson for Miami WorldCenter, which had been considered as a potential landing spot for a hypothetical Miami HQ2, said Amazon has not gotten back in touch about any new projects.

Amazon did not immediately respond to a request for comment. In November, the company announced the other half of the HQ2 project would be located in Northern Virginia. It also announced it planned to open an additional, 5,000-person office in Nashville, Tennessee.

The details of the package South Florida pitched to Amazon have still not been revealed. A spokesman for the Miami-Dade Beacon Council said a freedom of information request filed by the Miami Herald for the information is still being processed.

At a recent panel discussion about lessons learned from the process, Mike Finney, president and CEO of the Beacon Council, did not mention any specific feedback he’d received from Amazon officials about South Florida’s bid. The event was sponsored by the Miami Herald.

In a statement, Finney said the fact that the HQ2 project has been split into two now makes Miami even better positioned for it.

“The change in scope — given jobs and investment were ultimately divided among multiple communities — further enhances Miami’s opportunity to successfully deliver on the kind of partnership we know Amazon is looking for,” Finney said.

He confirmed that he has not engaged in conversations revisiting Amazon bringing any part of HQ2 to South Florida since Amazon’s final announcement was made.

Kelly Smallridge, president and CEO of the Palm Beach County Business Development Board, said she too would welcome Amazon back.

“We’re open for any new opportunities,” Smallridge said.

Miami Mayor Francis Suarez said he planned to reach out directly to Bezos to pitch the Magic City.

We are the only global city in America with the talent, tax favorable environment and tactical position to fit a global logistics company like Amazon,” Mayor Suarez said in a statement.

And Boca Raton Mayor Scott Singer tweeted, “Hey , heard many NYS leaders oppose deal for your 2nd HQ. We have 0% income tax & lower property taxes in , so you can come to  for a lot less cost, stress & cold. Be happy in  like many HQs. See recent  reports & !”

A spokesperson for Gov. Ron DeSantis’ office did not immediately respond to a request for comment about whether he had reached out to Amazon officials. Following the Washington Post report, Crain’s Chicago Business reported that Illinois Gov. J.B. Pritzker had already reached out to Amazon officials asking them to reconsider Chicago as an HQ2 location.

 

Source: Miami Herald

Amazon decided against putting its second headquarters in South Florida, but the online retailer opened another distribution center to ensure speedy deliveries in the tri-county area.

Amazon has opened a distribution center in 100,000 square feet at the Sawgrass International Corporate Park in Sunrise, according to Lou Sandors, the city’s economic development director. The space formerly was occupied by an online retailer called Fanatics.

Amazon spokeswoman Amanda Ip told the Sun-Sentinel that the company has 75 facilities nationwide like the new one in Sunrise.

Last year, the online retailer leased 50,000 square feet at 101 Northeast 23rd Street in the Wynwood area of Miami to support its Prime Now delivery operations.

In 2016, Amazon leased an 800,000-square-foot warehouse at Miami Opa-locka Executive Airport and a 117,235-square-foot space at the South Florida Logistics Center in Miami at 3200 Northwest 67th Avenue in Miami.

South Florida was one of 20 metropolitan areas on the short list to become the home of Amazon’s second headquarters, or HQ2, which will be established in New York City and Arlington, Virginia.

 

Source: The Real Deal

Doubts of growing your retail brick-and-mortar clientele have you reaching for antacid from the bubble wrap parcel on your porch?

Don’t post a “closed” sign on your commercial real estate journey. Instead, consider pivoting to 32-foot clear heights and secured trailer parking.

E-commerce keeps growing. In 2017, U.S. online retail sales increased 16% year-over-year, up four out of five years running, and yielded $453.5 billion in total sales, according to CBRE.  Of the 50 largest industrial leases finalized last year, approximately 43% involved e-commerce companies.

For some, specializing in industrial brokerage may be the way forward. Experts see the logistics real estate market as early stage.UBS forecasts the pace of change in e-commerce is expected to accelerate market-share transfer, from in-store retail sales to online, driven by quicker-than-expected adoption of mobile from consumers.

Speaking to the crowd at I.CON ’18 in June in Jersey City, the Senior Managing Director with Crow Holdings Industrial Clark Machemer put it, “Today’s warehouse industry is the logistics business.”

Now may be time to synchronize your industrial sales and leasing future, as demand is up for real estate along the rapid throughput supply chain. CBRE calculated that for an incremental $1 billion growth in e-commerce sales, an additional 1.25 million square feet of distribution space is needed to service the growth. NAIOP, the Commercial Real Estate Development Association, cited Forrester’s forecast where U.S. e-commerce sales will rise 9.3% annually over the next 5 years to top $523 billion.

Media interest in e-commerce has added foot-candle on the interrelationship of goods fulfillment factors and real estate. Of course, there’s the Amazon HQ2 bonanza. Over in home improvement, Home Depot is gearing up to spend $1.2 billion across five years on 170 distribution facilities to access “90% of the U.S. population in one day or less.”

In this unfolding era of omni-channel retailing, industrial pros know expanding the supply of new construction and repurposing obsolete facilities is about satisfying the space race. Site selection for first mile, middle mile and last mile facilities won’t just affect industrial parks. Inner cities are in play. It’s about population. Many e-commerce companies and third-party logistics providers want a perch near densely-packed rooftops of consumers.

Earning Their Business

With e-commerce projected as a growth driver over the next five years for both the U.S. economy and development of facilities, what imperatives should e-commerce clients expect from their industrial real estate brokers?

“E-commerce clients expect a level of sophistication from the industrial brokerage business that didn’t exist 10 years ago,” says William Waxman, executive vice president at CBRE.

Waxman is an authority on corporate, industrial and supply chain real estate. In 2017, he was awarded NAIOP New Jersey’s Industrial Deal of the Year for Blue Apron’s 495,000-square-foot lease.

“My e-commerce clients expect me to have a comprehensive understanding of what they’re doing,” Waxman says. “Not just an understanding of their business, but an understanding of their values. And to respect their values, and to make sure the developments, the facilities are respectful of their values, as well.”

Waxman, who also was a speaker at I.CON ’18, is well regarded for maintaining relationships.

“E-commerce clients especially want to know they have a trusted advisor in their industrial broker. They want to know everything will get done at a very high level. From a tertiary environment to a primary environment, the quality of the work will be the same no matter where the properties are located,” said Waxman.

Representing In A Disruptive Age

Whether you’re already growing your book of business or shifting careers, specializing in logistics real estate on property types that support e-commerce may be your next thing.

“It’s the kind of industry you just need to be passionate about,” Waxman says. “When your clients have a pain point, you must have a solution for them.”

Waxman observes clients in e-commerce desire collaboration, and hire a multitude of service providers on deals, so they expect connections from the broker.

“You’ve got to know the right experts, as a service of building-out their project teams,” Waxman advises. “My e-commerce and tech clients want me to recognize through cost-benefit analysis whether they would benefit from a particular economic incentives package, or benefit from an in-depth labor analysis. Don’t be transactional brokers. Be a resource. You’re working for their best interest. Whether you’re onsite at a trucking company, or in a Fortune 200 board room, show how you’ll save them money. It goes to their bottom line.”

Even though Waxman leads CBRE‘s world renowned Port and Integrated Logistics Practice, he doesn’t forget to pound pavement.

“Old-fashioned shoe leather – there’s nothing wrong with that,” say Waxman.

 

Source: Forbes