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.
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.
The rise of e-commerce is displacing some traditional retail demand, but it’s also creating new demand on the industrial and warehouse side.
E-commerce has spurred the growth of third party logistics facilities, also known as 3PLs. The facilities handle the order fulfillment behind the explosive growth of US online retail, expected to grow to $279 billion by 2015. These enormous warehouses and shipping centers are drivers of jobs and new construction and enablers of a massive and growing trend.