warehouse construction projects increase in the midst of economic shutdown

While most other segments of the national construction industry have seen notable declines in activity since the COVID-19 outbreak, new warehouse projects remain a bright spot, say analysts.

In a new report, the San Francisco-based real estate investment trust Prologis is reporting not only that the warehouse boom has remained strong for most of 2020, but that there is currently a need for at least 400 million square feet of new warehouse space in the next three years.

The demand, continues the report, is reflective of both “higher e-commerce volumes and higher inventory levels.”

One of the leading players in the field is online giant Amazon, which is enjoying record-breaking sales since the COVID-19 outbreak and needs new space to process hundreds of millions of customer orders.

Just two months ago, the online retailer announced plans to build a 465,000 square foot multi-level fulfillment center in Albuquerque. The company is also in the process of planning for an additional similar-sized center in El Paso.

But some of the new warehouse projects having nothing at all to do with Amazon.

Earlier this spring, the Atlanta-based Stonemount Financial group announced it is building a 230,000 square foot industrial complex in McKinney, Texas that will include 125,000 square feet of warehouse space for a chemicals company based in Mexico.

Work has already begun on the Elwood Logistics Center in Goodyear, Arizona, a 1.3 million square foot facility with warehouse space for anyone who wants it.

Increasingly, new warehouse projects are not just cavernous buildings with a lot of space, but structures built for high-tech needs including the use of mobile robots, and filled with modern equipment, cables, and wires.
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“Even before the pandemic, the gradual drift of shopping online was making warehouses an attractive bet,” notes the Wall Street Journal. “Now these unglamorous sheds increasingly look like trophy assets.”

​By Garry Boulard

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