What Industrial Owners Need to Watch

MIAMI—When it comes to industrial real estate, what should we keep our eyes on? That's what I asked Bill Waxman, executive vice president of CBRE's Global Port Logistics Group, in part three of this exclusive interview series.

But we didn't stop there. We wrapped up this series with talk about the real impacts of Panamax and what he sees for the industrial market in the quarters ahead. If you missed the first two parts you can still read Why the Industrial Market is Getting White Hot and The Unknown Challenges in Industrial Real Estate.

GlobeSt.com: What are the areas to watch?

Waxman: The industry should definitely keep an eye on the e-commerce sector. In the larger markets, including New York, Los Angeles, Chicago, and Seattle, we're seeing quick growth in same-day and next-day delivery.

Companies like Fresh Direct, Blue Apron, Peapod, and even Amazon that deliver groceries and prepared food to the home are major contributors to this trend in the e-commerce space. Technology supply, pet supply, home goods, and hardware companies are also keeping up with the trend in these larger cities.

The key areas to watch are the regions where this trend is still up and coming. In the near-term, we can expect to see an influx of same-day and next-day deliveries in the Houston, Dallas, Phoenix, and Denver markets. After that, we'll likely see further expansion into areas such as Oklahoma City, Kansas City, Cincinnati, and Memphis.

GlobeSt.com: We keep hearing about the Panamax. How is this really set to impact coastal ports?

Waxman: I think that the issue of the Panamax can be compared to all of the 'what ifs' of Y2K back at the start of the century. There are a lot of unknowns and all of this planning and plotting is definitely valuable, but at the end of the day I think we'll see the same amount TEUs coming to the east coast ports.

However, we'll also see more containers on one ship and less ships overall. This will reduce the ton-mile cost of each individual product and, in turn, reduce the costs of transportation and goods.”

GlobeSt.com: What do you predict for the industrial market in the quarters ahead?

Waxman: It's a very exciting time for industry, with so many changes taking effect. The changes in the logistics world upset the status quo and I think that the real estate industry has done a great job of reacting to it and will continue to do so. In the foreseeable future, I think we'll see continued strong activity, new construction and readaptation and should expect to reach equilibrium within the next year.