ATLANTA—The higher cost of locating e-commerce fulfillment centers in urban infill areas is more than offset by the logistics savings achieved by having good proximity to large population centers. That was one of the opinions offered by a panel of industrial developers and construction executives during NAIOP's E.CON.

“Companies more and more are interested in getting products out the door with same-day delivery,” says Stan Conway, executive vice president, Majestic Realty. “Logistics costs dwarf the land costs, especially with traffic getting worse every day. Most of these deals are ready to roll and controlled infill is the key component. These guys will pay more to be in these top locations.”

Jim Condon, chief development officer for Seefried Industrial Properties, says it can become challenging to do too many things specifically for e-commerce. “In our view, you can only do so much with e-commerce in mind,” Condon says.

Kevin Turpin, president of The Conlan Company, an Atlanta-based national construction-contracting firm, says construction is becoming more about what's inside the box. He says there is a menu of items typically required by fulfillment centers, including additional sanitary sewer, sortation mezzanines, higher clear heights and additional glass for office components of buildings.

Turpin says one of the most impressive construction advances he has seen is Ductilecrete, a layered, premium slab system that reduces moisture loss from the surface. He says it results in higher load capacities while using thinner profiles.

“It has few joints, offers superior load capacity and creates floors that are flatter and that remain that way,” Turpin says. “We poured almost three million square feet of Ductilcrete over the past few years.”

Responding to a question from the audience, the panel said they are building spec facilities that are potential e-commerce fulfillment centers in Central Pennsylvania, Baltimore, Houston, Dallas, Chicago, Salt Lake City, Denver, Los Angeles and Atlanta.

Another E.CON session offered a glimpse at the future as young e-commerce entrepreneurs told their stories and how their growth might affect their real estate options.

“I know nothing about commercial real estate, but I do know e-commerce,” says Steven Hong, president of Roswell, GA-based Sylvane, an online retailer of air treatment appliances. The young company currently does $20 million in annual sales and employs more than 30 people. Small, but fast growing, Sylvane, has evolved using a series of 3PLs, until Hong says they found the Goldilocks model. Sylvane recently signed a lease for 40,000 square feet of space in an opportunity zone in Roswell.

“That was a key for us,” Hong says. “We receive tax credits for everyone we hire, which is fantastic. It's an awesome space to recruit and retain talent.” Sylvane uses a Delaware-based 3PL and is looking at adding another in Utah to serve the West Coast. “We can do it faster and cheaper, but it doesn't mean we don't need a 3PL,” Hong says. “They definitely play a role.” Hong predicts that in five years his company will have additional 3PL usage and a company-run facility in the western U.S.

Hadi Irvani, founder of PeachDish, an Atlanta online retailer of fresh pre-proportioned food, says his company provides a farm-to-table service. PeachDish ships more than 1,800 meals per week across the country from a 20,000-square-foot facility. The company uses Delta Air Lines flights to serve the California market. Irvani says the online food industry is underserved when it comes to the availability of speculative cold storage warehouses. “This is a new, growing area of e-commerce and it will continue to grow,” Irvani says.

Michael Landsburg, vice president of real estate for NFI Industries, a New Jersey-based 3PL, says his company is trying to figure out how to deal with e-commerce fulfillment. He says about 10 percent of his company's business as an e-commerce component to it. NFI has partnered with Amazon to handle some of its larger products such kayaks and electric generators.

“E-commerce isn't just small boxes,” he says. “It's the large stuff as well.”