How does an Industrial space developer try to build properties that will last 50 years and beyond? It's not easy to predict what owners and tenants will want in the future. According to Mary Lang, CBRE Investment Management's head of Americas logistics & strategies “ What we are telling all of our clients is you need to be cautious about the older stuff in the logistics environment, because we view the future of logistics similarly to the future of office”.
For example, the properties that are leasing are newer buildings with the best amenities. Lang says “ Industrial will face similar conditions in the future, as changing demands for parking, energy and environmental impact draw potential tenants away from older product”.
Some of the changes in the construction of future Industrial buildings may include stronger floor slabs, higher clear heights, greater roof load capacity for solar installations and most importantly, the need for more power to run the new truck loads coming in.
Change is definitely coming for Industrial and Logistics facilities and developers, architects and investors believe that it will arrive with electric vehicle production being supported by Federal incentives and regulations.
An April 2023 report from consulting firm McKinsey found that commercial operators are seeking to decarbonize their businesses.
According to Lang “Power is definitely the new parking, the single greatest amenity going forward in the logistics environment is going to be the availability of power”.
This will require developers to change the physical setup for parking areas and reconfiguring power ahead of time to make sure facilities can get enough electricity to charge vehicle fleets.
California recently passed legislation banning the purchase of gasoline powered vehicles after 2035 with New York following suit last Fall.
Lang says “ And where New York goes, New Jersey, Maryland, Connecticut and Massachusetts follow”.
Developers need to anticipate where future regulation is going long before it takes effect.
To be continued...
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