Innovations in Industrial Real Estate [September 2017 Breakfast Recap]
NAIOP’s September 20 breakfast meeting convened in Southcenter near the epicenter of King County’s industrial area. This meeting on Innovation in Industrial Real Estate was sponsored by Centerpoint and Rushing. We sincerely thank them for their support.
President Kristin Jensen opened the meeting; our annual business meeting included election of our 2018 officers and ratification of the actions of the 2017 board.
Rob Aigner of Harsch Investment Properties moderated our panel which included:
- Kathy Craft-Reich – Craft Architects
- Bart Brynestad – Panattoni Development Company
- Patrick Gemma – DCT Industrial
Kathy began with a fascinating presentation on the Prologis Georgetown Crossroads. This project is very close to the urban center of Seattle which offers advantages for the customer base and the workforce. This three-story project provides truck access on the first and second floors; the third floor is used for vertical freight management, common areas, offices, and light assembly and manufacturing. This project may be the set the tone for the future of industrial real estate and is a real thought-provoker.
Rob asked Patrick to comment on the question, “What are the drivers from a developer’s perspective?” Patrick’s response included:
- 32- to 36-foot clear height spaces
- 7-foot slabs
- Trailer yards – tremendous demand for this and the flexibility they bring
- LED lighting
Patrick highlighted the Port of Tacoma Blair Logistics Center as an illustration of these drivers.
Bart related that it is all about the consumer and the changing face of retail with “The Amazon Effect.” Logistics centers need to be closer to the population centers because consumers demand faster delivery.
Patrick related that manufacturing is still a big play and that increased power demands are being seen in every new manufacturing facility.
Rob asked the panelists to give an assessment as to where we were in this development cycle. Bart indicated that this has been the longest lasting cycle he has experienced. Even so, he foresees at least another two years of runway.
Patrick believes we are in the latter stages of this cycle and related that Seattle currently has the highest industrial rent growth in the world.
Bart also commented that finding land is a big issue and a big part of his daily endeavors.
Patrick outlined how the risk equation is changing; risks are currently associated with wetlands, FEMA and working through all of the governmental entities.
Kathy indicated that the development cycle for projects is increasing to two times longer than in the past.
Bart stated that industrial developers must be flexible, that automation is a growing trend and that more redevelopment will result from the constraint of land availability.
We’ve seen Amazon’s impact on the Seattle urban core. This informative and interesting presentation provided insight into the ripple effect on industrial real estate in Seattle and the surrounding areas.