Top 10 Industrial Stories From 2016
Industrial real estate is one of the hottest sectors in the industry this year, with tech innovations such as autonomous cars and cultural shifts favoring e-commerce boosting demand. Below are Bisnow's top 10 stories for the industrial sector this year.
10. South Bronx Emerges As An Industrial Powerhouse
The loss of space in New York City has increased South Bronx's appeal, making it more relevant than ever for warehouse space. Properties are being squeezed into the outer boroughs, driven by the growth of online shopping which continues to increase companies' need for warehouse space close to large pools of customers.
9. Blackstone To Re-Enter US Logistics Business?
Blackstone Group cut a deal with LBA Realty to grab a portfolio of logistics centers for $1.5B. Most of the warehouses are on the West Coast. It's a major return to the segment for the world's largest private real estate owner, which had left the logistics business when it sold IndCor Properties for $8.1B.
8. Down With Office Buildings, Up With Warehouses
In an effort to keep up with demand in the red-hot industrial market, some developers have taken to doing the unthinkable — ripping down old office buildings in soft markets and replacing them with warehouse and distribution centers. The need for warehouses on the outskirts of major markets has been exacerbated by growing e-commerce demand. This trend is particularly evident in New Jersey and Long Island, where aging office complexes are losing tenants. Developers are replacing those properties with warehouses to get distribution centers closer to NYC.
7. Big Pharma Company Taps Huge Atlanta Facility
Bayer grabbed a huge chunk of Atlanta real estate early in the year when it inked a deal for an 800k SF distribution center in Greenwood Industrial Park — the park that's home to both Amazon and Tyco Health Care.
6. Tesla's Gigafactory
Elon Musk's plan for Tesla Gigafactory is simple: manufacture and produce Tesla batteries faster than cars can fly off the shelves. Bisnow took readers through the 5.5M SF factory in Sparks, NV, which boasts solar panel roofs that will use zero energy. The factory is expected to complete in 2020.
5. Tesla Quietly Emerges As A Major Real Estate Player
The electric car company has been gobbling up Bay Area real estate this year, aiming to build a record one million cars by 2020 and closing in on Apple and Google as a major real estate holder in the Silicon Valley. Tesla claimed 6.6M SF of commercial property in the first half of 2016.
4. The Country's Strongest Industrial Market? Inland Empire
Southern California's Inland Empire has benefited greatly from the booming industrial sector, Colliers International's Steve Bellitti told Bisnow. Thanks to the market's assortment of large distribution centers and its proximity to the Port of Long Beach, the market is the strongest in the US, housing some of the country's largest industrial spaces and boosting local economies by adding to the labor force.
3. Tech Innovations Transform Industrial Real Estate
Technological advancements in transportation and manufacturing will continue to shape industrial real estate well into the new year. A CBRE report in September honed in on three tech disruptions impacting industrial real estate, including the autonomous vehicle boom — with Uber already test driving driverless cars in Pittsburgh — 3D printing, and a rise in industrial automation. CBRE's David Egan told Bisnow he expects the industry to really feel the ramifications of these innovations within the next 20 years.
2. Six Ways The Supply Chain Is Changing Industrial Real Estate
Industrial real estate is among the hottest asset classes this year, and its renaissance has been driven by consumers' ever-increasing activity online. That's causing some major shifts in the modern supply chain. After speaking to Prologis head of research Chris Caton, Bisnow assembled a list of six key trends impacting supply chain modernization — from globalization to last-mile delivery and sustainability efforts.
1. E-commerce King Takes Over Atlanta Facility
It was speculated back in June that Amazon would move into another distribution center in Atlanta, taking over TPA Group's 614k SF Broadway Distribution Center in Braselton. The deal was confirmed the following month, with Georgia Gov. Nathan Deal making Amazon's purchase of the new big-box facility official.