Industrial development seems to be back into full swing, but many aspects of this cycle are new and different. A panel of NAIOP professionals will consider what the current drivers are at the I.CON-The Industrial Conference, with one panel looking specifically at where development is occurring and how. Michael P. Murphy, chief development officer of CenterPoint Properties in Chicago, will lead the discussion. GlobeSt.com's Antoinette Martin spoke with him by telephone for a preview.
GlobeSt.com: Where is development occurring? Let's say you have to answer that in a single word or phrase.
Murphy: Intermodal. There is a lot of development activity today around our transportation hubs. As a company, we are focusing strategy on intermodal areas, sites that provide supply chain advantage with truck distribution sites near ports or rail heads. In Chicago, we've recently done two new distribution centers for Home Depot, one stocking distribution center and a neighboring rapid deployment center.
GlobeSt.com: How is e-commerce affecting development patterns?
Murphy: When companies are making decisions about where to build today, it requires a highly sophisticated analysis of the logistics and supply chain to determine what was a much simpler question: Pay higher rent to be closer to consumers, or pay less rent and try to deliver efficiently from further out? As e-commerce and the question of same-day deliveries enters in, the industry and clients have to be even smarter in how they decide.
GlobeSt.com: What is new and different about the type of industrial buildings in demand today?
Murphy: Buildings are being designed from inside out. The big companies like Amazon and Home Depot are not moving into the old 'dumb' warehouse. These new centers are being built to optimize inventory space within the building. Clear heights are increasing, there is more stacking, more product stocked within the same footprint, and everything is designed to be more 'green' and efficient.
GlobeSt.com: How about the perennial questions concerning trucking and fuel costs? How are they affecting the industry?
Murphy: When the cost of diesel gets to $5 a gallon, it definitively changes the cost of moving product. With intermodal distribution, we can drive boxes to rail and get long-haul truck drivers off the road. In the end, it's good for all of us: Truck drivers can make their deliveries and be home for their dinners and sleep in their own beds. It's more sustainable and more cost-efficient.
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