Jaroszewski: For investors, an incredibly low vacancy rate environment is pushing rents considerably and steadily higher, and escalations show no sign of waning significantly. This can equate to stable income when purchasing a well-occupied property. For tenants, steady population growth—particularly strong in the Millennial age cohort—can only help. (This population increasingly “requires” same-day or next-day delivery for online shopping and e-retailing.) Tenants can also seek out incentives to move/relocate from other states. Finally, the sheer magnitude of new construction that has just recently been delivered or is presently being built on a speculative basis makes it a choice time to be a user seeking new space to occupy.

GlobeSt.com: What submarkets are hidden gem areas for distribution that many aren't talking about? Why should we be paying attention to them?

Jaroszewski: In reality, nearly the entirety of the Salt Lake industrial market can be considered a “hidden gem.” All throughout, large corporations are finally tuning in and discovering the virture of the market as a true distribution hub. For Denver, the Southeast submarket has seen increased activity—both transactional and initial-touring-state; second-quarter absorption increased threefold over first quarter totals. Southeast also affords users easier accessibility to other parts of the city. The West submarket may see above-average rental rate growth, given that it has recently gained momentum according to metrics. It, too, offers favorable access to major highways.

GlobeSt.com: What distribution trends will we be talking about in your market at this time next year?

Jaroszewski: Continued growth within e-commerce and the increased push for online retailers to meet even more demanding delivery times. Omni-channel logistics will have a greater impact. (Already, Amazon has recently taken 452,000 s.f. and looking for more space; Best Buy's 250,000 s.f. build-to-suit; Walmart's two 1.5 m.s.f. warehouses.) Denver is increasingly positioning itself as a well-known stop in the distribution network. In order to feed a rapidly expanding population, food manufacturers will increasingly seek warehousing space.

JLL recently released its list of top 18 distribution markets. Markets from New Jersey, to Southeast Texas, to Florida and Minneapolis made the list. In addition, five West Coast markets made the cut. In this exclusive Q&A, GlobeSt.com chats with an industry source from one of the West Coast industrial markets that made the cut—the Rocky Mountain Region.

GlobeSt.com: Please describe one factor that makes your market a top distribution market:

TJ Jaroszewski, JLL Senior Research Manager (Rocky Mountain Region): Geographical location (isolation: Denver's the most populous city within 575-mile radius) makes it a natural selection for locating a distribution center. The region plays a key part in the transfer of consumer goods and raw materials throughout the US, and it is crisscrossed by five major interstates, providing movement of goods and raw materials in every different direction. Transport companies are able to reach the west coast within a 24- to 48- hour timeframe. Nearly to the exact same minute and mile, Denver sits midway between two of the nation's largest three industrial markets—Chicago and Los Angeles.

GlobeSt.com: What opportunities for industrial investors or tenants exist in the Rocky Mountain region?

Jaroszewski: For investors, an incredibly low vacancy rate environment is pushing rents considerably and steadily higher, and escalations show no sign of waning significantly. This can equate to stable income when purchasing a well-occupied property. For tenants, steady population growth—particularly strong in the Millennial age cohort—can only help. (This population increasingly “requires” same-day or next-day delivery for online shopping and e-retailing.) Tenants can also seek out incentives to move/relocate from other states. Finally, the sheer magnitude of new construction that has just recently been delivered or is presently being built on a speculative basis makes it a choice time to be a user seeking new space to occupy.

GlobeSt.com: What submarkets are hidden gem areas for distribution that many aren't talking about? Why should we be paying attention to them?

Jaroszewski: In reality, nearly the entirety of the Salt Lake industrial market can be considered a “hidden gem.” All throughout, large corporations are finally tuning in and discovering the virture of the market as a true distribution hub. For Denver, the Southeast submarket has seen increased activity—both transactional and initial-touring-state; second-quarter absorption increased threefold over first quarter totals. Southeast also affords users easier accessibility to other parts of the city. The West submarket may see above-average rental rate growth, given that it has recently gained momentum according to metrics. It, too, offers favorable access to major highways.

GlobeSt.com: What distribution trends will we be talking about in your market at this time next year?

Jaroszewski: Continued growth within e-commerce and the increased push for online retailers to meet even more demanding delivery times. Omni-channel logistics will have a greater impact. (Already, Amazon has recently taken 452,000 s.f. and looking for more space; Best Buy's 250,000 s.f. build-to-suit; Walmart's two 1.5 m.s.f. warehouses.) Denver is increasingly positioning itself as a well-known stop in the distribution network. In order to feed a rapidly expanding population, food manufacturers will increasingly seek warehousing space.