NAIOP I.CON Conference Recap
Ware Malcomb leaders recently participated in the annual NAIOP I.CON West Conference, the nation’s largest annual gathering of industrial real estate professionals. Vice Presidents Radwan Madani and Tom Myers joined the year-long planning efforts to execute both 2021 NAIOP I.CON events. During NAIOP I.CON West, which took place in Long Beach at the beginning of September, Directors Kate Lyle and Sergio Valentini moderated panels of industry leaders. Ware Malcomb has been a proud NAIOP sponsor and partner for over 20 years.
Speculative Cold Storage
Kate’s panel was focused on speculative cold storage warehouse development. A few key takeaways from the panel:
Available Inventory of Cold Storage is Largely Old and Out of Date – Inventory is not meeting demand, requiring either updates or new buildings, leading to the consistent, increased demand for cold storage. Changing Consumer Demands Increasing Need for Cold Storage – Rapid change in consumer behaviors and preferences are also driving an increased demand for cold storage. Grocery store chain Kroger reported a 16% increase in digital sales, with a two-year stack of 108% in 2020 according to a company press release. Kroger was cited by the panel as an example of the growing grocery e-commerce landscape. Consumers expect a wider variety of options and faster delivery of product than is currently available.
Acceptance of Speculative Cold Facilities is Increasing – Industry acceptance of speculative cold storage facilities is increasing among institutional investors. Speculative cold storage facilities need to be designed with flexibility to accommodate different end users.
Opportunities in Urban Middle/Last Mile
Sergio’s panel focused on logistics trends and increased demand for last-mile land locations. A few takeaways from the panel:
Increasing Demand for Land in Dense Urban Areas – Urban land development is necessary to support last-mile delivery stations and e-commerce demand. The need for urban land is impacting not only the industrial market, but also the metropolitan infill markets raising rents and shifting focus on lower coverage developments with high parking ratios. Future Conversions of Big-Box Retail Facilities – There is anticipation that more conversions of large retail facilities to last-mile facilities will take place. The conversions could include facilities and sites being resized and designed to support large delivery fleets. Vacant suburban Class B and C office also present an opportunity for last-mile redevelopment.
Increased Adoption of Last-Mile in Food Delivery Space – The panel anticipates that last-mile demand will increase in the food delivery space. An increased integration of robotics technology in the delivery system is also expected. In addition to moderating the panel, Sergio also conducted the South Bay Adaptive Reuse Tour, which showcased local land conversions in El Segundo, Torrance and Long Beach. Thank you to Goodman, Hackman and Prologis for hosting the tour. Since 1972, Ware Malcomb continues to be a leader in industrial and cold facility design utilizing the latest trends and technologies that maximize value for our clients. We are committed to innovate and push the limits of design and sustainability. Check out our Industrial Portfolio below.