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How Your Amazon Order Spurs The Real Estate Market

How Your Amazon Order Spurs The Real Estate Market

The busier UPS is, the more likely you are to end up with a warehouse rather than a shopping center by your home. DCT Industrial Dallas SVP Art Barkley tells us the evolution of Cyber Monday and next-day delivery is sparking demand for more and fancier distribution centers, particularly in highly populated areas. Big-box industrial facilities used to be built on the cheapest land, often in the boonies. That MO is out the window now, Art says; next-day service and increased online shopping means the supply chain has to move faster. That's pushing distribution centers close to the rooftops and upping the ante on design.

How Your Amazon Order Spurs The Real Estate Market

Art says this trend has been ramping up over the past three years. Today, all of DCT's customers have an online component to their business. Whether selling automotive parts out of a 10k SF facility or selling furniture out of a 500k SF distribution center, the common denominator is that the bulk of the purchase activity is conducted online. Some customers have a B2B orientation while others focus more on B2C, but either way, purchases are being handled online, skipping the need for the retailer. It’s all customer-driven, Art tells us, and the businesses without an Internet presence won't survive in the long run (nor will the ones slow to satisfy online orders).

How Your Amazon Order Spurs The Real Estate Market

These urban distribution centers also need to be smart buildings with good dock door layouts and close to high-speed Internet lines. Those kinds of facilities aren’t available in the smaller cities or rural locations, Art says. That’s why Denver-based DCT is focusing on the major metro areas from Seattle and the Bay Area to LA, Dallas, Houston, Chicago, the DC corridor, the Tri-State area, Atlanta, Orlando and down to Miami, Art tells us. DCT owns interest in more than 400 properties totaling approximately 73M SF with about 95% occupancy nationwide. Currently DCT has 22 development projects (totaling 6.9M SF) under development (and 91% pre-leased). Included in these developments are a 100% leased 734k SF building in Atlanta and a 100% leased two-building development totaling 299k SF in Baltimore/Washington, DC, both for e-commerce customers.