newsworthy
THE INDUSTRIAL REAL ESTATE MARKET WON’T ESCAPE THE EFFECTS
of a moderating economy in 2019, but savvy developers will focus on new opportunities in urban fulfillment and intermodal logistics, according to year-end research
from real estate services firm JLL. Released Dec. 19, the research report, A down-shifting of growth, forecasts a pause in the industrial real estate market this year
due to modestly rising interest rates, a cooling overall economy, and the lingering
uncertainty businesses are facing over tariffs and global trade tensions.
But there are emerging opportunities for all, despite the slowing conditions,
according to JLL. “We’re entering the late phase of the business cycle, but even
a pause year in 2019 will have a silver lining,” Craig Meyer, president of JLL
Industrial, Americas, said in a statement announcing the findings. “We have an
opportunity to close the gap between demand and supply of industrial property—
and that gap is significant. Industrial vacancy is at a record low of 4. 8 percent, even
as new space comes online quickly.”
Meyer said developers, service providers, and real estate occupiers will need to
combine knowledge, experience, discipline, and “data-driven insight” to succeed
in the slowing environment. “While anyone can succeed in a rising tide, only smart
operators thrive in a slowing environment with an uncertain outlook … Being
street-savvy is the right strategy for today,” Meyer said.
For developers, that means watching demand trends closely while envisioning
new kinds of facilities to support last-mile delivery in urban areas. Innovative
entrepreneurs will address demand for one-of-a-kind fulfillment and delivery facilities, including multistory urban “infill” centers that command high rents, Meyer
and his colleagues said. Savvy developers will also pursue intermodal inland port
opportunities, as cities such as Phoenix, Denver, and Salt Lake City seek to connect
by rail to sidestep a shortage of trucking capacity.
Savvy occupiers will watch last-mile delivery trends closely as well, the researchers said, viewing total occupancy costs as encompassing not just rents, but also the
cost of inventory, transportation, and labor for last-mile deliveries. Smart companies will “pinpoint their last-mile delivery strategies around locations where population nodes and density intersect with the optimal demographics for their unique
customer base,” the researchers said.
—Victoria Kickham
Slowing economy spells pause
for industrial real estate market
Four key trends will shape
the supply chain landscape in
2019, including developments
in robotics, risk management,
recruitment and hiring, and
digital transportation solutions, contract logistics services
provider DHL Supply Chain said
Jan. 8.
“Supply chain complexity has
been growing for years, and
several of these trends threat-
en to create even more com-
plexity,” said Scott Sureddin,
CEO of DHL Supply Chain,
North America, in a state-
ment. “However, we are also
now seeing key technologies
reach a level of maturity that
enables them to be used to bet-
ter manage complexity while
also increasing productivity
and reducing costs. That makes
2019 a very exciting year in
the continuing evolution of the
industry.”
As for the four trends DHL
predicts will shape the industry
in 2019, they are as follows:
Warehouse robotics come of
age. Robotics are already proving their value in select warehouse applications, but the
technology is expected to reach
a tipping point in 2019, according to DHL. The DHL Supply
Chain distribution network is
an example of the leap robotics
could make, highlighted by the
company’s recent announcement of plans to expand its
use of select emerging technologies by 2020,
Logistics service
provider lists top
supply chain trends
for 2019
p. 14
