The development of a handful of high-profile multistory
warehouses in large urban markets combined with a tighter
market for light-industrial properties offers a glimpse of the
evolving marketplace.
MULTISTORY’S MOMENT
IPG is developing a large multistory last-mile facility in the
Bronx to help shippers meet e-commerce delivery demands
in the New York City area. Slated to open in 2021, “2505
Bruckner” is one of a few big projects making industry
headlines as the race to conquer urban delivery heats up,
and Chung says the unique facility represents a transformation of the supply chain.
“In logistics, it’s all about how long it takes to get from
one place to another,” Chung says, pointing to the cost
advantages and efficiency of delivering more products
to urban populations from a single, centralized location.
“Supply chains need to be adjusted for the new way that
goods are being transported and [orders] fulfilled to customers,” he says.
For Chung and others, multistory makes the most sense
for meeting those demands. The 2505 Bruckner facility will
be situated on 20 acres in the Bronx, at the intersection
of five major truck routes that can access more than 9. 4
million people in a 15-mile radius, reaching consumers in
Manhattan, Queens, Brooklyn, Long Island, Westchester
County (New York), and Connecticut. The 980,000-square-
foot building is being developed on a large site that previ-
ously housed a dilapidated movie theater, a unique oppor-
tunity in an urban setting, Chung admits, noting that “such
a large tract of land in an urban environment is virtually
impossible to find.”
The design features a two-level structure built to meet the
needs of a modern warehousing and fulfillment operation,
with ceilings that can accommodate modern vertical rack-
ing systems—up to 32-foot heights—and truck and trailer
access on both levels. Ramps will allow delivery trucks
to access an elevated truck court on the second level, for
instance. Ample parking is another key benefit; the site will
include eight trailer parking spaces, 125 box-truck parking
spaces, and 730 car spaces.
IPG is set to break ground on the facility this year and
has two other such projects in the works. Running roughly
12 to 18 months behind the 2505 Bruckner schedule, IPG’s
two additional multistory facilities will be located in Long
Island City, New York.
Melinda McLaughlin, head of U.S. research for logistics
real-estate development firm Prologis, agrees that there is
a growing need for modern high-tech facilities in urban
areas as supply chains shift, and she says new development and reuse of existing facilities will continue. Prologis
opened “Georgetown Crossroads,” a 580,000-square-foot
three-level facility, in Seattle in 2018 to serve city distribution and last-mile delivery needs in the region. The facility
was the first modern multilevel industrial facility of its kind
in the United States—featuring truck access ramps and
forklift-accessible freight elevators to reach the upper levels.
Prologis also renovated a retail site and redeveloped it as
“Prologis Bronx,” a smaller-scale, two-story facility being
leased by Walmart e-commerce subsidiary Jet.com.
“Modern properties [in dense urban areas are] very
rare, but we’ve seen some really strong demand for those
properties as supply chains get closer to end-consumers,”
McLaughlin explains, adding that the benefits of a large
modern facility that can easily reach millions of people can
outweigh the associated higher real-estate costs. “The functionality they can bring is increasingly valued.”
SMALL IS IN DEMAND
Last-mile facilities (or “last touch,” as Prologis refers to
them) in urban areas tend to be located in smaller, older
buildings, and even those that are “less functional” are
