Same-Day Delivery Redefines Industrial Tenancy

Transwestern's Bob Robers Shares Insights in "Ask the Expert" Publication

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Jan 14, 2014, 03:06 ET

HOUSTON, Jan. 14, 2014 /PRNewswire/ -- Online shopping continues to increase and consumers are paying a premium for same-day delivery. Distributors, importers and external vendors of all sizes fulfill much of the merchandise ordered on popular websites, such as Amazon, Walmart and Costco. Traditional industrial buildings do not accommodate these tenants very well because more employees are needed to pick, pack and sort merchandise as delivery times get shorter, according to Transwestern's first-quarter edition of "Ask the Expert," featuring Bob Robers, a senior vice president specializing in industrial real estate and logistics.

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Transwestern's Bob Robers, specialist in industrial real estate and logistics, shares insights on how same-day and expedited delivery is impacting industrial real estate tenants in the first-quarter edition of "Ask the Expert." (PRNewsFoto/Transwestern) (PRNewsFoto/TRANSWESTERN)

It has become increasingly difficult for industrial tenants to find suitable space in many of the traditional distribution hubs of Atlanta, Chicago, Dallas, Los Angeles and New York/New Jersey/Pennsylvania. In addition, new development in many U.S. markets is not keeping pace with increased demand. As a result, it's a bit of a mad dash to secure space.

As large brick-and-mortar retailers are handling more online orders, retail logistics have continued to evolve. Many retailers have embraced the concept of omni-channel distribution, which utilizes a combination of warehouses, distributors and brick-and-mortar stores to satisfy consumer demand.

However, many retailers are sending more business to third-party logistics companies (3PLs), which are hired to provide outsourced warehousing and fulfillment services. While this may seem like a strong economic indicator, it could be viewed as a contra-indicator. If large corporations were more confident in the economy, they would be more inclined to redesign their own distribution network and build more of their own distribution centers. Instead, they choose to outsource to a 3PL for shorter term commitments.

"Ask the Expert" is a Q&A with Transwestern experts and leaders. Download the full version here: http://www.transwestern.net/public/corporate/AskTheExpert/AsktheExpert_1Q2014_TAS.html

ABOUT TRANSWESTERN
Transwestern is a privately held real estate firm specializing in agency leasing, property and facilities management, tenant advisory, capital markets, development, research and sustainability. The fully integrated global enterprise leverages competencies in office, industrial, retail, multifamily and healthcare properties to add value for investors, owners and occupiers of real estate. Transwestern facilitates better decision-making for clients by combining penetrating local market intelligence and macro-market research through its affiliate, Delta Associates. Transwestern has 34 U.S. offices and assists clients through more than 181 offices in 40 countries as part of a strategic alliance with Paris-based BNP Paribas Real Estate. For more information, please visit www.transwestern.net and follow us on Twitter: @Transwestern.

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SOURCE Transwestern