We attended an Industrial Panel earlier this week in Philadelphia where we heard some interesting tidbits. Some highlights were:
- All pricing (rents, land, sales PSF) in the PA/NJ market are at an all time high.
- Digital Natives (those born after 1990) are driving the warehouse market demand. The average person consumes 50 sf per person or warehouse space per year.
- E-commerce is driving the show and the new warehouses are not your father’s warehouse.
- The box has changed as a result of e-commerce (32 foot clear has moved to 36 foot clear).
- Given the increased demand LTV for big box projects have gone from 80% down to 65%.
- Developers are conceding FAR for parking as more workers are in each e-commerce facility.
- Floors need to be thicker to support greater rack weight.
- With higher clear height floor must be flat. Developer must use Laser guides to ensure critical flat floor finish.
- I-81 Corridor is rebuilding its infrastructure and Pennsylvania continues to be a great location for e-commerce distribution given the road systems and the access to population.
- Manufacturing/flyover states are in better shape in this recovery.
- Sand states have bigger tax burdens.
- The truck driver shortage continues to be a problem.
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