Why Developers Desire To Develop Multi-Floor Warehouses Near Urban Areas

E-commerce has had a significant impact on the daily lives and livelihoods of many. This is especially true for commercial realty.

The most important reasons for retail's struggles are often attributed to new online shopping and electronic commerce trends. However, developers and investors have some exciting options when it comes to eCommerce.

Watch out for logistics and warehousing.

Developers are seeking new ways to meet the demands of a growing supply chain. Many are looking for new ways to build up and move away from traditional warehouse models.

Amazon Has Rewritten the Rules of Warehousing:

 The other major retailers, such as Target, Walmart, and Macy's, are all trying to catch up.

The historical model of building warehouses in remote areas was the one that prevailed before Amazon. These areas are more affordable and have plenty of space to accommodate large footprints.

This model is changing partly due to consumer demands for faster delivery. The ability to shop at any time and have packages delivered in a matter of days is changing how consumers interact with retail.

Recent research by Capgemini revealed that 55% would switch brands if there was faster delivery. According to the same survey, brands that offer same-day or two-hour delivery will attract more customers.

Trade Land for Location:

The supply chain must catch up with the demand, as shorter delivery times mean that there will be a lower level of need. Developers are seeking opportunities near dense urban centers where they are building.

Distribution centers are moving into urban cores due to increased e-commerce activity and consumer delivery expectations.

Even though there are more restrictions in these areas, developers are willing to sacrifice higher land and labor costs for closer delivery.

Developers are not ignoring the potential for other financial benefits.

They are also able to save more logistics costs by living in the ideal area. The logistics cost savings outweigh higher real estate prices associated with living closer to urban centers. Thus, they are not only achieving greater efficiency but also saving money.

The Hottest Markets:

These expanding markets will be centered on the coasts of the country.

The coastal markets are the best place to see true multi-story. Developers are encouraged to build because of the scarcity of land due to geographical and population constraints.

Real estate prices have risen in major cities like San Francisco, New York, Chicago, and Miami.

These areas are significant because of the people they serve. For example, over 50 million people are living in the Northeast corridor. It runs from Boston to Washington. These households are more likely to require next-day or same-day delivery, according to data.

Renovating Existing Warehouses:

Developers are also looking for other solutions, even though many new constructions are underway, like the multi-story warehouse recently completed in Seattle.

Redevelopment of old warehouses and restructuring former retail sites, vacant shopping malls, and vacant grocery shops into multi-story warehouses.

Developers are raising the roof to take existing warehouses to new heights. Retrofitting traditional one-story warehouses can dramatically increase ceiling heights up to 60 feet. In addition, these provisions permit mezzanine-style multi-story warehouses.

This type of development also has the added benefit of improving working conditions. So it's not only a cost-saving measure that allows for larger warehouses, but it also creates a more pleasant work environment.

It's evident that e-commerce has transformed the way consumers interact with retailers, and it is now transparent for investors and developers. As a result, the supply chain is also ready to catch up. Multi-story warehouses are one way to do this.