Browse Tag: industrial

Third Party Logistics (3PL): Video Refresher

The industrial property subcategory 3PL, or third party logistics, is a rapidly expanding market across the US.  Steady growth in e-commerce has created a growing dependency upon these warehousing and logistics properties thanks to their effect of reducing delivery time on goods shipped to customers. With e-commerce sales worldwide set to pass $2 trillion in 2017 in pursuit of double-digit annual growth, knowledge of the 3PL industry will pay off for the commercial real estate professional patrolling this piece of the national supply chain. What follows in this post are two helpful sources of quick information about the 3PL as it lives and breathes today.

 

Video: Dynamic 3PL Logistics

If you’re in need of a rapid refresher on the global supply chain and need a helpful glimpse at the shape and vocabulary of 3PL, check out this short video by 3PL provider Dynamic 3PL Logistics.  To the point, short, yet packed with illuminating info, this clip will get the point across about 3PL — fast.

Fifty Most Successful 3PLs

While far from a comprehensive or updated list, the article “North America’s 50 Most Successful 3PLs” from SupplyChainBrain.com collects an excellent top-down view of North America’s top 50 3PL operators, including some depth on the operations, local and global. Researchers arriving to this market will find a useful bookmark here.

 

Where Is Commercial Real Estate Oversupply?

English: Welsh Assembly Office Construction De...

The national market for commercial real estate is a massive thing, a meta-market encompassing tens of thousands of localities, each with their own economies and histories, subject to their own internal logic — and illogic. When trying to take all of these in as a whole, it’s important to remember that the local stories always loom larger than might be apparent, and that effects are overwhelmingly driven by local needs, wants and preferences.

That said, some indicators are more easily acquired nationally than others. Construction delivery is one. More inventory arriving may influence performance for existing, surrounding inventory, but delivered construction always opens the door (when taken as an aggregate) to the possibility of overbuilding.

With that indicator’s strength in mind, Susan Persin’s piece in REITCafe (registration required) looks at national construction deliveries in the major sectors of CRE and finds where the numbers suggest demand and supply are growing out of balance, tipping toward supply.

In apartments, the high end of the market in NYC and SF get a jaundiced eye from Persin:

[…]REITs with significant investments in markets like Manhattan and San Francisco, such as Avalon Bay (AVB) and Equity Residential (EQR) have cut their revenue forecasts several times this year, citing weakness in these markets.[…]

Persin also noticed some developments in office markets in Dallas, Houston and New York that have the “o” word — overbuilding — rearing its ugly head. Quoting Sam Zell’s recent Bloomberg interview — a chipper affair otherwise — shows Zell concurring about a situation in NYC office that sees new construction as outpacing demand there.

Get the full article — with commentary on all the major CRE sectors of retail, hospitality, industrial  — at Trepp REITCafe for a free registration.

Photo credit: Wikipedia

Atlanta’s Thriving Industrial Property Market Attracts Adidas

English: Seal of Atlanta.
Seal of Atlanta. (Photo credit: Wikipedia)

Xceligent’s most recent report on Atlanta’s industrial property market (download the Atlanta 2Q Industrial Market Report PDF here) is packed with great news for the property business – falling unemployment, high absorption, sliding vacancy rates, and a strong record of adding industrial-using jobs with almost 24,000 added year-over-year.

New Speedfactory To Set Foot In Cherokee County

The industrial growth in Atlanta metro is strong enough to compel international shoemaker Adidas to locate its newest factory there rather than Asia. A milestone in both local development and industrial automation, the “Speedfactory” headed for the Cherokee County / I-575 area northwest of Atlanta mirrors a similar Adidas facility running in Germany. The new factory is expected to produce 50,000 pairs of shoes per year while employing 160 workers.

3D Printing, Robots and Rap

The Speedfactory design is the result of a successful pilot program run by the company last year that relies heavily on technology and recycling to get the job done. 3D printers and automated manufacturing will meet with recycled polyester and plastic to produce shoes near to consumers in the US market. Boosting sales in the US is a major goal of the company, which has welcomed the recent endorsement of rapper Kanye West to reattach the elusive characteristic of “cool” to the brand, perhaps lost since the 1980s heyday of early rappers Run-DMC.

At 70,000 SF, the new Adidas project joins 2.5 million SF of light industrial inventory online as of 2Q in Atlanta’s Cherokee County area. The suburb’s light industrial space has seen a minor negative absorption in 2Q16, with 4,400 SF of space newly available from Jan 1.

The new Speedfactory is scheduled to open in the second half of 2017. Download a PDF of Xceligent’s Atlanta 2Q2016 Industrial Market Report here.

 

Motor City Starts Up Again: Detroit Industrial Vacancy Falls To 6%

Detroit’s industrial real estate past is a story of too many eggs in one economic basket.  When the over-concentration of auto industry capital fled Detroit, the communities that capital once sustained vanished, and the rest is rust belt history.

But the fact is the auto industry didn’t vanish entirely. Today, strong demand in auto sales pushes Detroit and its suburbs toward an industrial output that represents a giant step toward long-missing sustainability.  Robert Carr’s piece in NREI:

“You can’t find a lower vacancy rate in Detroit in the past 20 years,” [notes John DeGroot, research manager at real estate services firm NGKF]. “A big part of it is auto sales. The average yearly sales mark for the Big Three was around 16 million since 2002. During the recession we saw it dip to 10 million, but now we’re hitting 17.5 million per year.” Auto experts predict that figure will continue in 2016.

Typically, the suburbs around Detroit have fared better with industrial leasing and construction, with I-75/Auburn Hills, Macomb county and Western/Southern Wayne county being the preferred locations for new, modern facilities. However, though Detroit proper has many obsolete or dilapidated industrial buildings, the city is now a major draw for new construction as well, DeGroot says. Since 2015, the city has seen more than 765,000 sq. ft. of new construction completed, according to a second quarter NGKF report.

More from NGKF on the specific projects and locations in Detroit’s long path to industrial recovery:

Increased industrial demand in the city of Detroit continues to drive new construction of modern [facilities]. Much of the city’s existing inventory suffers from a form of functional obsolescence and/or physical deterioration and difficult to find users to absorb. Since 2015, the city has seen over 765,000 square feet of new construction completed. Auto supplier Flex-N-Gate is the latest company to make a significant investment in the city. The company recently announced plans to build a 500,000-square-foot production and sequencing facility on a 30-acre site in the industrial park located near Interstate 75 and I-94. Meanwhile, Lear Corporation is in the planning stages of building a new manufacturing plant in the I-94 Industrial Park. These planned upcoming developments follow the 904,000 square feet that is currently under construction, which include: Crown Enterprises’ 500,000-square-foot distribution facility for its Universal Truckload Services; YFS Automotive Systems Inc.’s 150,000-square-foot manufacturing facility; and Sakthi Automotive’s 540,000-square-foot expansion on Fort Street.

Colliers: US Industrial Vacancy Lowest In A Decade

q1-colliers-industrial-market-outlook

The newest US Industrial Outlook from Colliers puts Q1 2016 in its sights.  Bottom line: the news is good.  Q1 shows the lowest national industrial vacancy rate in over a decade.  Decline in industrial vacancy marked its 22nd consecutive quarter to arrive at 6.3%, which is 70 basis points lower than this time last year.

Although new construction is on the rise, the demand still outpaces new supply.  According to Colliers, construction completions added up to 60.1 million square feet of new supply in 1Q 2016, adding up to a near-record 0.40% of total inventory.  At the same time, 63.8 MSF of industrial space was absorbed, logging an eye-popping 9.6% increase over this time last year.

You can download a free copy of the information-packed report from Colliers “US Industrial Market Healthy Despite Headwinds” after the link.

Subtropolis: Going Underground in KC

Imagine: six million (and counting) square feet of warehouse space, with a mind-boggling potential for fourteen million. A location central to the US. And climate that never strays from 65-71 degrees Fahrenheit.

There’s only one catch: it’s 100 feet underground.

Welcome to Subtropolis, the commercial space under Kansas City, MO that started as limestone mines and has since developed into a logistics and storage solution for 53 businesses employing over 1,700.  Tenants include the US Postal Service, a film cold storage facility housing reels of “Gone With The Wind” and “The Wizard Of Oz”, as well as a University leasing out classrooms.  The complex got going in the 1950s when its first tenant – a NASA scientist seeking controlled conditions to test equipment – moved in.

Check out Subropolis’s site here.  And enjoy the coverage by Kansas City channel 41 News.

It sure gives a whole different meaning to the term “underground economy”.

 

Commercial Real Estate News Roundup For January 12, 2016

English: Rubber city with the spirit of Akron ...
Akron, OH. (Photo credit: Wikipedia)

Four areas of retail real estate to watch in ’16, heightened apartment demand stemming from soft home demand, spotlight on Indiana, and a big deal closes in Rubber City, aka Akron, OH — it’s all here in today’s National Commercial Real Estate News Roundup.

Office

Multifamily

Industrial

  • United Pipe And Steel Renews 100K SF Lease – REJournals Jan 10, 2016 – Franklin, IN tenant keeps its footprint right where it is.
  • Five Ways To Get Large Commercial Property Tax Refunds – Orlando Business, Jan 9, 2016 – It pays to understand the appraisal process.
  • Triangle Industrial Market Remains Model Of Good Health – News & Observer, Jan , 2016 – A low vacancy rate and considerable storage needs for local businesses are driving the NC Triangle’s industrial market.

Retail

Video Gallery: The Fed Has Raised Rates, But Is More Coming?

The cost of money has come up for the first time in more than nine years: the Federal Reserve Bank announced a raise in its short-term interest rate of a quarter point. For a quick look at various takes on the move, check out the following video gallery:

 

NAR: NAR Chief Economist Lawrence Yun Analyzes Fed Rate Hike

 

Bloomberg video: Fed Raised Rates Without A Hitch And It Only Took $105 Billion.

Bloomberg Video: Fed’s Lockhart Suggests Pace Of Four Raises Over A Year 

 

Bloomberg Video: Don’t Expect Big Profits At Banks In Wake Of Rate Raise

 

NPR: The Fed Raised Interest Rates: So What Happens Next?

 

 

Detroit Shifts Gears To Technology

A pair of articles today explain a new renaissance in Motor City commercial property and infrastructure centered on technology business expansion. Together they point out how this isn’t the economic and cultural stretch one might think for the town that so famously put its industrial eggs into one auto-making basket – and saw globalization and capital flight devastate its fabric when that industry chose foreign labor.

In Dan Rafter’s piece at REJournals.com Detroit A Tech Hub? You Bet the report mentions the recent Jones Lang Lasalle’s US Technology Office Outlook report that ranks Detroit among the top 30 in the US for total leases to the technology business.

You might be surprised to learn that Detroit has become a top target for tech start-ups. JLL in its U.S. Technology Office Outlook report ranked the city as among the top 30 in the nation for total tech leasing. What makes Detroit so appealing for tech firms? JLL pointed to low real estate costs, an affordable cost of living and a competitive pool of talented employees.

These factors are inspiring technology start-ups to open their doors in the Motor City. According to JLL’s research, the Detroit market is now supporting 50,796 tech jobs. JLL says, too, that Detroit’s high-tech employment rate is growing 4.3 percent each year.

The Detroit market has been home to some significant tech lease transactions. Griffels recently renewed its lease of 67,934 square feet in the Mars Corporate Center in Southfield, while Logicalis took out a 40,500-square-foot lease at 2600 Telegraph Road in Bloomfield Hills. Lochbridge recently took out a 29,000-square-foot lease at 150 W. Jefferson Avenue in Detroit’s CBD.

Electric Cars And A Fiber Freeway

Adding to the resurgence is more technology, both in infrastructure and in manufacturing target. Ford Motors has recently decided to invest $4.5 billion in the manufacture of electric and hybrid cars by 2020, which adds to the tech resurgence.  As reported in GlobeSt. by Brian Rogal:

“One of the things that people don’t realize about Detroit is that the auto industry is heavily dependent on the high-tech sector,” Dave MacDonald, an executive vice president ofJLL, tells GlobeSt.com. And the recent decision by Ford to invest billions in electric vehicles will further boost the need for tech workers.

Another big factor bolstering technology companies here is the presence of Quicken Loans and its family of companies, which have bought up more than 80 downtown properties, many of them 75 to 100 years old, the type of structure most favored by tech-savvy millennials. “Quicken is really a tech company,” MacDonald says, and it has filled these buildings with about 13,000 workers, helping to send the CBD’s vacancy rate into a historic plunge.

And last month Rocket Fiber, a Detroit-based fiber-optic provider that is part of Quicken’s family of companies, has just activated an internet fiber ring for the city’s downtown that at an affordable price offers connections 1,000 times faster, MacDonald says. In its latest report on the US technolgy sector, US Technology Office Outlook, JLL compares it to “the Google Fiber model that spurred business and startup activity when it deployed in Kansas City.”

Affordable commercial property options and 21st century infrastructure in a great American central business district is the kind of news Detroit – and office tenants eyeing it – can surely use.

Presenting the 2015 National Commercial Award Winners

2015commercialawards

At NAR Expo 2015, the announcement came for the year’s winners of the National Commercial Awards. We offer our deepest congratulations to these leaders in their markets and associations!

As is so often the case, the credentials are strong with this group – you have Certified International Property Specialists (CIPS), Society of Industrial and Office Realtors (SIOR), Accredited Buyers Representatives (ABR), Certified Commercial Investment Members (CCIM) just to name a few of the distinctions these leading professionals have amassed.

2015 Winners Poster

Pick up a poster with all the winners printed on it by downloading a PDF right here. 

2015 Winners Handout

Or get all the winners in a handy two-page handout format – grab that PDF from this link.

The Program

If you want to recognize the sterling achievements of a commercial professional in your association or market, it’s easy.  Contact Shara Varner at [email protected]