New warehouse construction is expected to increase for the foreseeable future, largely because the country’s current warehouse stock is aging and inadequate for today’s e-commerce needs.
So says a new report issued by the United States Commercial Real Estate Service of Los Angeles, which notes that most of the up and running warehouses built in the U.S. before 2005 have limited use for e-commerce distribution purposes.
Such structures are hampered by the fact that they are too small, with ceilings that are too low, uneven flooring, and inadequate docking.
In addition, according to the Commercial Real Estate Service analysis, even though some 1 billion square feet of new warehouses have gone up since 2008, just under 90 percent of the nation’s total 9.1 billion square feet of warehouse inventory is more than three decades old.
In a statement, David Egan, the head of the Commercial Real Estate Service’s industrial and logistics research department, said that e-commerce has created a demand for a “new type of warehouse with different dimensions, locations, and capabilities than what most of the existing U.S. supply offers.”
Egan added that “given that only a small portion of the overall market is truly modernized, there is a strong case for new construction and redevelopment of outdated facilities in many markets.”
The report, entitled Old Storage: Warehouse Modernization in Early Stages, pinpoints northern New Jersey and Pittsburgh as having, at nearly 60 years on average, the oldest warehouses in the nation.
The average age of the warehouse stock in Denver, by contrast, is 36 years, while in Phoenix it comes in at 26 years.
“Warehouses built since 2008 are generally three times larger than older ones,” notes the report, even though those facilities currently make up only “4 percent of the nation’s total number of buildings.”
By Garry Boulard
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