The e-Commerce Industry boom has been created by millions of ecommerce consumers who increasingly expect products to arrive the same day they hit send. Hence, today’s strong demand for last mile warehousing space.
While not confirmed, The Real Deal is reporting that Joseph Sitt’s Thor Equities is scrapping plans for a Norman Foster designed office complex on the Red Hook waterfront to build an industrial distribution center there instead.
According to Marvin Schein of Salmar Properties “Amazon, Best Buy, Net a Porter, all of these retailers are looking for industrial space that’s centrally located in the New York City and has easy access for loading and unloading”. That’s what’s happening throughout the country.
According to JLL “95% of the roughly 2.5M square feet of industrial space leased in New York in 2018 was for e Commerce and Logistics companies”.
There’s now more than 700,000 sq feet of new warehouse and other industrial space being built throughout the city and another 4.8M feet proposed.
According to Pricewaterhousecoopers, 41% of consumers are willing to pay extra for same day delivery and another 23% would pay extra for delivery in 3 hours or less.
DH Property Holdings plan to accommodate last mile deliveries is to build a new 4 story distribution center at the 18 acre Sunset Industrial park in Brooklyn. Once the 1.4 M square foot facility is completed, delivery trucks will be able to drive up ramps and load and unload on each floor.
Andrew Chung of Innovo Property Group says "he sees modern industrial real estate as the biggest growth opportunity across all commercial property types. E Commerce is 10-12% of all retail and it’s growing in the double digits. We don’t see this slowing down at all”.
New York City is at a turning point with the rise of eCommerce and consumer needs. Over the last 2 decades Amazon has become America’s solution for almost anything and everything and fast. Consumers want it now, but our infrastructures have not yet adapted, which leads to the resurrection of the Urban Warehouse.
Currently 25-30% of warehouse space in the U.S. is devoted to e Commerce and the number is expected to rise. In NYC especially there is only so much available space/land within close promimity to the urban core that can be equipped to handle our modern delivery needs.
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