How Has Ecommerce Changed Industrial Design?

Ecommerce has been a major driver of industrial activity, both leasing and investment activity, this cycle. But it has also transformed the entire industrial industry, from logistics to industrial facility design. Today, warehouses with large truck yards are a staple, and soon, multi-story industrial projects will become the norm in California (multi-story industrial has already arrived on the East Coast). CapRock Partners, an active industrial developer based in Orange County, has focused on ecommerce users and their unique industrial needs.

“As one of the leading industrial developers and investors in the West Coast, we are on the cutting edge of advanced designs,” Jon Pharris, president of CapRock Partners, tells GlobeSt.com. “All our projects can accommodate e-commerce users easily, as we have designed each building with excess trailer parking spaces, ample parking stalls and market-leading clear heights, among other features. CapRock is also expanding our development focus in targeted areas outside of California as demand in neighboring states warrants new industrial construction.”

While warehouse design is changing rapidly, land is limited for new development, especially in infill markets. While these warehouse design trends will continue to evolve in markets outside of urban cores, like the Inland Empire, multi-story industrial is coming to urban infill markets. “While we believe that multi-story industrial will become an option in the future in the Southern California market, we are focused on delivering our robust industrial pipeline, which could include upwards of 10 million square feet in the next few years,” adds Pharris.

Looking ahead, CapRock doesn’t see any slowdown head in the industrial market. In fact, Pharris says that there are three main drivers of the industrial market: West Coast ports, which handle more than 50% of all imports into the U.S.; ecommerce and the growth of online shopping; and population growth. These three drivers have created a dynamic ecommerce market, and there he is not concerned industrial is too reliant on ecommerce growth. “In our view, the strength of these factors will remain strong in the Western U.S. We are always cognizant of the overall economy and potential cyclical downturns, but right now industrial has more tailwinds than potentially any other real estate investment class,” he says. “With the exception of a recession, we do not expect online shopping to slow down. In fact, when looking at many other nations, the percentage of online shopping in the U.S is lower. Now that millennials are starting to reach higher income potential as they advance in their careers, online shopping should continue to grow.”