RETAILERS BULK UP
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|Some retailers "over-corrected" when downsizing their inventories during the downturn and are bringing inventories back up. At the same time, they're paying a lot more attention to efficiencies.|
|Prologis East region capital deployment senior exec Mark Levy(who's speaking at Bisnow's Baltimore Industrial Summit on May 30) tells us that while retailers may be bulking up, they and other warehouse/distribution users toning up supply-chain management, too, striving to create more distribution-network efficiencies, especially in e-commerce, where speed to the consumer is crucial to competition.|
|For industrial real estate users, that means a quest for highly functional and more-efficient distribution space: 24-foot or higher ceilings, 130-plus-foot truck-court depths, a minimum of 40- by 40-foot column spacing, high dock/door ratios, and T-5 or better lighting. He also says users are more focused than ever on infill locations near population centers and highways. That makes regional distribution hubs like Baltimore, which services the nation's fourth-largest MSA (DC/Baltimore) strategic locations. Hence Prologis' sale (brokered by Cushman & Wakefield) of its outlying, Harford County properties: 500 Hickory Dr (above), 600 Hickory Dr (below) in Aberdeen.|
|Prologis also sold 1701 Trimble Rd in Edgewood to Kohl's for its e-commerce operations. Those three dispositions cleared out the firm's Harford County holdings. Mark says the portfolios AMB and Prologis brought to their merger a year ago were complementary. Prologis now owns 5.8M SF in Baltimore, mostly in the B-W Corridor, and Mark would like to acquire and develop more and has several opportunities in the pipeline, he says, though sensible acquisition opportunities are few. He tells us pricing is driving returns down, making the market frothier than in the last cycle.|