Amazon Signs 1M SF Distribution Center in California

Amazon has filled yet another major order. The king of online sales signed a lease for a 1 million-square-foot distribution center in Central California. It will be the anchor tenant at one of the largest industrial commerce complexes in the Western U.S., according to the landlord, Wonderful Real Estate. The massive industrial park is in the city of Shafter, bordering Bakersfield, and also includes major tenants like Walmart, Target, and Ross Stores.

Amazon’s continued expansion comes as online shopping and e-commerce consumer activity surges in the U.S., further demonstrating the persistent need for warehouse and industrial space. Amazon will use the 72-acre property at 4500 Express Avenue to sort and ship items including apparel, accessories, and footwear. The site will create more than 1,000 full- and part-time jobs that pay a minimum of $15 per hour. The deal also comes shortly after the owners announced that Walmart signed a lease to occupy a 630,000-square-foot, grocery-focused distribution center at the same Wonderful Industrial Park (WIP).  The 1,625-acre distribution center complex is approximately 100 miles north of Los Angeles. It is entitled for 26 million square feet, and nearly 10 million square feet are leased and under operation following the Amazon lease.

The park’s location allows access to 14 percent of the U.S. population within 300 miles, and same-day delivery to 30 million Californians, according to Wonderful Real Estate. The site also boasts access to the Port of Los Angeles, the Port of Long Beach, and the Port of Oakland. The property features a FedEx Ground hub on-site, and is near a UPS ground hub in Bakersfield, where Amazon opened another distribution center last August.  Ross Stores occupies more than 3 million square feet of space, while Target is signed to 2 million square feet of space at WIP. Other occupants include Essendant (Staples), American Tire Distributors, Formica, and Hillman, as well as other third-party logistics companies. “Despite COVID-19, the commercial real estate story of 2020 and the first quarter of 2021 continues to be how hot the industrial market is, with tenants like Ross, Walmart and now, Amazon, choosing to locate these major mission-critical facilities at WIP in consecutive years,” said Joe Vargas, president of Wonderful Real Estate Development, in a press release.

Amazon has been busy around the country, and throughout the state of California. The firm recently announced another new delivery center in Silicon Beach in L.A., and in November, Amazon acquired the Orange County Register’s former printing location for $63.2 million, and plans to demolish it and build a new last-mile distribution warehouse. In the first quarter of 2021, Wonderful will also break ground on its latest speculative development, a 1.1 million-square-foot property at 3800 Fanucchi Way in WIP, which is set to be complete before the end of the year.

Source: Commercialobserver.com/2021/02/amazon-e-commerce-consumer-demand-industrial-distribution-california/

North Fork Rancheria launches new business to support jobs, local economy

For Immediate Release: North Fork, California, January 28, 2021– During a time when the region has been impacted by the COVID 19 pandemic and devastating Creek Fire, a new business blossoms in the foothills of Madera County. In a continued effort to promote economic development for its tribal citizens and community, the North Fork Rancheria of Mono Indians of California (NFR or ‘Tribe’) is announcing plans to open an automotive shop in February of 2021.

The federally recognized Indian Tribe’s latest commercial venture will be located at the North Fork/’Old’ Mill Site at the corner of Road 225 and Douglas Ranger Station Rd. North Fork Rancheria Automotive Repair (NFRAR) will officially open its doors with a soft-opening ceremony scheduled for February 1, 2021. Due to the COVID19 Pandemic, a Grand Opening Celebration will be scheduled as soon as health experts determine it is safe to gather. New clients will be offered many service specials during February.

Tribal Economic Development

NFR Automotive Repair is a wholly owned subsidiary of the North Fork Rancheria Economic Development Authority (NFREDA), an unincorporated governmental instrumentality of the North Fork Rancheria of Mono Indians. NFREDA was established to improve the lives of Rancheria citizens by growing employment and business opportunities as well as funding sources for diverse tribal programs.

The new venture will generate new jobs and roughly $170,000 in new annual revenue for the North Fork area, providing local area residents a way to shop and invest locally. Proceeds from the operation will fund tribal social, training, and assistance programs for enrolled citizens, further benefiting the surrounding community.  “The Tribe is proud to be a long-standing partner in developing Eastern Madera,” said Elaine Bethel-Fink, NFR Tribal Chair, “especially in a key service industry like this that is underserved locally.

NFR Auto Repair is not the NFREDA’s first business venture. In 2019, NFR opened the Nim Nobe General Store, located at 32555 Way Up Way in North Fork. Lacking any casino funding, the Tribe has nonetheless managed to take the lead to build, expand, or refurbish numerous businesses and community assets, including a Tribal Headquarters Office, Community Center, Family Wellness Youth center, Volunteer Fire Station, TANF Social Services Building, Transportation & Training Center, Low-income housing, a water storage tank, Sierra Mono Museum Expansion and Renovation, and future Cultural and Environmental Protection Center. “This is what great tribal-local partnership looks like,” said Bobby Kahn, Executive Director of the Madera County Economic Development Commission (EDC), “and we look forward to more things to come.”

In keeping with the health concerns of the times, NFR Auto Repair personnel will take necessary precautions to maintain a clean environment.  Employees will wear gloves.  Steering wheel covers, floor mats, and seat-covers will be used while operating customer vehicles.  Customers with access to computers have the option of touchless repair orders and invoicing. For more information find us on Facebook, and our google business site https://nfrautorepair.business.site

https://www.northforkrancheria-nsn.gov/north-fork-rancheria-launches-new-business-to-support-jobs-local-economy/

California Dreaming: Fresno company makes tech industry training, jobs accessible to everyone

You may not think of California’s Central Valley as the place for up-and-coming talent in the technology industry, but one company is looking to change that. Bitwise Industries, based in Fresno, is breaking down the idea of what the tech workforce looks like and making sure training and jobs are accessible to everyone, no matter their background.

Irma Olguin Jr. and Jake Soberal co-founded the workforce development company. Olguin says her family came to Central Valley to work in agriculture, “My immigrant family moved here to follow the crops-a family of field laborers. And, in my own way, I found my way to the technology industry. I ended up in a job that just profoundly changed my life and existence and the opportunity that I saw in front of me.” Soberal also comes from an immigrant family that had their lives changed by the technology industry and one television commercial, “There was an ad for something called the ‘Computer Learning Center.’ That was what ultimately led to my dad becoming a computer programmer, which was an inflection point in his life and then, by consequence, in my life.

Together, the pair is trying to change the face of tech in California. “The technology industry has historically excluded folks who come from non-white ethnic groups, excluded non-straight individuals, excluded non-male individuals, and on and on,” says Soberal. “What that does is, it creates barriers to that opportunity for most people.”

Bitwise uses a radically different system of training to target underrepresented groups — they pay students to attend classes. “When you are coming from a story of, whether it’s systemic poverty or generational disenfranchisement, the thing that you can’t afford to do is to work for free or trade your time for an education that may or may not result in a job,” says Olguin. “So, we mash those things together in a way that has really afforded these folks the opportunity for the very first time to spend their time on something that may pay back dividends to them, their families, their communities and generations following.”

One of those students is Miguel Hernandez, who spent time in prison for burglary, “I had some trouble with the law when I was younger. It kind of started off in high school, you know, with hanging out with the wrong crowd. That’s when I started getting introduced to robbing houses.” While behind bars, Hernandez decided to turn his life around, “I got a short-term internship at Habitat for Humanity. When that had ended, that’s when Stephanie from Bitwise had handed out a flyer, and they called me, and they’re like, ‘Hey, we know you’re interested in tech, did you want to try this class out? It’s free for people who have been previously incarcerated people who have misdemeanors or felonies.’ Going into that class, at first, I felt alienated until I realized that everyone else there is like me, you know, we’re all the same people, all the same stories, you know?”

Olguin says that chance to reinvent yourself is the California dream. “For me, when I think about the dream, I think about folks who look like me, folks who come from similar backgrounds, folks who are typically from underserved and underrepresented populations, having the chance of whatever it is they want to do right here in California.” Soberal says that the California dream isn’t dead but concedes, “It is not having its best decade. We can do so much better, and there are now hundreds and even thousands of folks that have come through our doors at Bitwise, that are a testament to exactly that.”

Hernandez is grateful for places like Bitwise that help make the Golden State a better place to live. “After had got my felony, I thought it was over,” said Hernandez. “It’s a beautiful feeling knowing that there are people who care for us out there, giving us a second chance that we all deserve.”

https://abc7news.com/california-tech-jobs-representation-in-technology-fresno-bitwise-industries-training/10367619/

Amazon unveils plan for large distribution center in Shafter

Amazon announced Thursday it plans to open a “fulfillment center” in Shafter by the end of this year that will become the e-commerce company’s second large distribution facility in Kern County. Employing more than 1,000 people full and part time, the more than 1 million-square-foot center is expected to launch by the end of this year, packing and shipping “softline” goods such as apparel and footwear to customers across the region. The location of the new center was not disclosed.

The Seattle-based company said it will be hiring to fill positions at the new facility including human resources, operations management, safety, security, finance and information technology. Employment at the center will pay at least $15 per hour and immediately offer various benefits including a 401(k) retirement savings program with a 50 percent company match. “Amazon is excited to make this investment in Kern County that will support local economic development and help us deliver to our growing number of customers in the region,” Amazon’s director of regional operations, Jordan Nelson, said in a news release. “As we continue to grow in California, we are contributing to the economic recovery in the Southern California and across the state.”

Shafter Mayor Cathy Prout said in Amazon’s news release the company remains competitive and continues to welcome new businesses. “During unprecedented times, cities nationwide are dealing with economic growth or the negative impacts these challenging times bring,” she stated. “For Shafter, this is not the case.” Earlier this year Amazon opened a large fulfillment center just north of Meadows Field Airport.

It has also been negotiating on at least two smaller sites, one in northern Bakersfield and one in the city’s southern portion, where people involved in the proposed transactions say the company hopes to open smaller, more locally focused distribution centers.

https://www.bakersfield.com/news/amazon-unveils-plan-for-large-distribution-center-in-shafter/article_7e9019a8-7248-11eb-acc2-cba0dedc3464.html

Clearway Completes Construction on Rosamond Central Solar Project

Clearway Energy Group (“Clearway”) announced today that it completed construction and reached commercial operations on the 192 MW Rosamond Central solar project in Kern County, California. Rosamond Central is contracted under Power Purchase Agreements with East Bay Community Energy and Clean Power Alliance, both Community Choice Aggregators providing a diverse range of power options to regional customers, and the City of Palo Alto Utilities, which has administered Palo Alto’s electric power system for 120 years.

“We are proud to continue contributing to California’s goal of 100% clean electricity and keep the state on the forefront of climate leadership,” said Valerie Wooley, Vice President of Origination at Clearway Energy Group. “In a year with countless headwinds, Rosamond Central came together thanks to the dedication and effort of many partners, including McCarthy’s swift action to create a safe working environment, and the trust of East Bay Community Energy, Clean Power Alliance, and City of Palo Alto to meet their customers’ demand for clean, reliable, and low-cost renewable energy.” “We’re excited to have energy projects like Rosamond come online and start serving our customers with clean energy that will maintain long-term rate stability. This project has given us the opportunity to create much needed jobs and allowed us to meet California’s ambitious renewable energy goals ahead of schedule,” said Natasha Keefer, Director of Power Planning and Procurement, Clean Power Alliance.

“This marks the first new utility-scale solar project built to serve EBCE customers with clean, affordable, renewable energy,” said EBCE CEO Nick Chaset. “EBCE’s 112 megawatts from this project lays the foundation of our portfolio of projects that will serve our electricity customers throughout Alameda County.” “The City of Palo Alto Utilities has been delivering 100% carbon neutral electricity to our customers since 2013, and we’ve been proud to do so while maintaining highly competitive rates compared to neighboring utilities,” said Dean Batchelor, utilities director. “This new power purchase agreement further enhances our ability to offer clean, renewable energy at an affordable rate, supporting our utility’s mission and citywide sustainability and climate action goals. With the addition of 26 MW generated by the Rosamond project to our energy portfolio, solar energy will now supply almost half of Palo Alto’s total electric needs each year.”

Construction of Rosamond Central began in February and was led by McCarthy Building Companies. More than 600 jobs were created during construction and the site will sustain several permanent operations and maintenance jobs. The solar site also represents a $5 million investment in Kern County through tax revenue to support area public services and will generate enough clean energy to power more than 71,000 homes each year.

This year, Clearway partnered with East Bay Community Energy to distribute $250,000 in grants to more than two dozen community-based organizations in Alameda County providing emergency relief and to purchase personal protective equipment for area frontline workers and at-risk community members during the pandemic.

Clearway is one of the largest renewable energy companies in the state with about 1,800 MW of operating renewable energy assets. Rosamond Central will expand Clearway’s footprint in Kern County, where the company owns and operates 1,053 MW of wind and solar energy assets and contributes approximately $20,000,000 in annual property taxes to the local economy. In December, Clearway announced a joint equity transaction for a 1.6 GW portfolio that includes Rosamond Central.

https://www.clearwayenergygroup.com/press-releases/clearway-completes-construction-on-rosamond-central-solar-project/

Luxury resort sets ground breaking at old Clarion site

The coronavirus pandemic may have shut off business travel to Las Vegas and other cities, but developer Lorenzo Doumani is betting big that this line of business will be up and running again. Doumani announced Monday that he plans to break ground in July on Majestic Las Vegas, a 720-room luxury hotel off the north Strip. He expects to finish the roughly $850 million resort in 2024.

The project site — former home of the Clarion hotel, which Doumani imploded in 2015 — is across the street from the newly expanded Las Vegas Convention Center, and Doumani said his nongaming hotel will cater to business travelers. “We’re not a typical leisure tourist destination at all,” he told the Review-Journal. Majestic, 305 Convention Center Drive, is slated to include restaurants, live entertainment, a medical spa offering “executive physicals” and nutrition counseling, and 35 corporate suites spread among the tower’s top 10 floors.

The suites, which could be used for convention and showroom space and the like, are offered for sale and priced from $10 million to $100 million, a news release said. Doumani, who is scheduled to hold a media event Wednesday to discuss the project, obtained Clark County approval of his plans in 2019 and had hoped to break ground last year. Then the pandemic hit, turning life upside down, devastating Las Vegas’ tourism-dependent economy and, Doumani said, delaying his plans by 15 to 18 months.

With coronavirus vaccines being rolled out, there is widespread hope that the pandemic’s end is in sight, and Doumani figures that the outbreak will be stamped out by the time he opens Majestic. “I certainly hope so,” he said. “It would have to be.” The pandemic has kept people home and away from crowds for fear of getting infected, putting the kibosh on corporate travel as business gatherings moved online to Zoom or other video chat sites.

Doumani said that he intends to focus his corporate-suite sales efforts on tech, entertainment, sports and fashion companies and that after the pandemic is over, people will still be “wary” of massive crowds. At Majestic, he said, companies can have their own suites and control who comes in. “I think people are going to very wary of large spaces,” he said.

https://www.reviewjournal.com/business/luxury-resort-sets-ground-breaking-at-old-clarion-site-2241433/

Dave’s Hot Chicken Signs Deal to Open 20 Stores in Central California

Dave’s Hot Chicken announced today it has inked a franchise agreement with DAMM Fine Chicken to open 20 locations throughout Central California.  “During this exciting period of growth, we want to partner with experienced and qualified franchise partners to help accelerate our momentum. The DAMM Fine Chicken team fits that bill perfectly,” says Bill Phelps, CEO of Dave’s Hot Chicken. “Their experience will be crucial as Dave’s Hot Chicken continues its expansion throughout California.”  “Dave’s Hot Chicken instantly stood out to us from the other chicken concepts that are out there,” says Martha Olmos, the Chief Operating Officer for DAMM Fine Chicken. “They have a great innovative product that people love and continue to crave long after they first tried it. Our team is looking forward to the future with Dave’s Hot Chicken.”

The DAMM Fine Chicken team brings with them over 30 years of experience in the restaurant industry to Dave’s Hot Chicken. The operators were formerly owners of several Taco Bell locations, and currently own over 20 Blaze Pizza restaurants. The team will focus on adding Dave’s Hot Chicken locations throughout the Central Valley, Central Coast and Sacramento areas of California. The DAMM Fine Chicken team believes strongly in becoming part of the fabric of the community and plan on supporting local non-profits in their communities.

Founded by classically-trained chef Dave Kopushyan and three friends in early 2017, Dave’s Hot Chicken initially opened as a parking lot pop-up, with lines quickly wrapping around the block. Since then, the brand has exploded in popularity and now has multiple brick-and-mortar locations open in Southern California. Today, the fast-casual brand has its sights set on growing throughout the United States through franchising and has several multi-unit agreements in development.  Specializing in hot chicken tenders and sliders, with spice levels ranging from “No Spice” to “Reaper,” each restaurant also serves sides of house-made Kale Slaw, creamy Mac & Cheese and crispy Fries or Cheese Fries.

https://www.qsrmagazine.com/news/daves-hot-chicken-signs-deal-open-20-stores-central-california#:~:text=The%20DAMM%20Fine%20Chicken%20team%20will%20focus%20on,Chicken%20to%20open%2020%20locations%20throughout%20Central%20California.

Bioenergy interest heats up in Kern County

Kern County business developers have seen a surge of interest lately from companies looking to build waste-to-energy projects that could create hundreds if not thousands of new local jobs in producing fuels that cut greenhouse-gas emissions. Four new bioenergy proposals came to the attention of the Kern Economic Development Corp. in the last half of 2020, joining four other prospects under active consideration. Most of the projects would employ more than 100 workers. One would dwarf the others with as many as 1,390 jobs across 100 to 200 acres.

Bioenergy has attracted substantial local investment in recent years as state lawmakers offer subsidies and favorable policies to promote big spending on infrastructure necessary to convert food waste, ag trimmings, dairy manure and even dead forest trees into cleaner-burning fuel whose environmental benefits can add up to be carbon negative. KEDC Vice President of Business Development Melinda Brown said the projects crossing her desk lately represent a variety of “green energy” technologies inspired by state mandates. Together, she said, they amount to a noticeable shift in interest in local manufacturing and industrial property. “They’re telling me this is all new industries” under development, she said Monday.

State legislation in 2016 targeted reductions in methane and other short-lived pollutants by forcing local jurisdictions to cut the amount of organic material they collectively send landfills by three-quarters. The best way to do that depends on the feedstock. Food and food-processing waste can be treated as dairy waste increasingly is, by fermenting it and refining the gas it produces into an easily stored fuel. Because that doesn’t work as well with waste such as vineyard prunings and almond hulls, another approach is to super-heat dry, fibrous, feedstock. That produces an energy-dense fuel and biochar, which can then be buried, or sequestered, to achieve carbon-reduction gains. Lawrence Livermore National Laboratory has estimated this technology could become a central tool for meeting California’s aggressive climate-change goals.

The executive director of the Bioenergy Association of California, Julia Levin, said Kern is “the perfect place for it,” not only because of the county’s large supply of ag waste but also its inventory of elected and appointed government officials who recognize the industry’s benefits, value and the opportunity it presents. Some environmental groups have actively opposed biofuels, in part because they usually entail emitting at least some pollution and older production techniques release relatively high levels of particulate matter. Many climate-change activists are pushing for an end to internal combustion altogether.

Levin said new technologies are much cleaner and that the alternative in much of the Central Valley is open burning. “You’re going to see a lot of growth in Kern County (bioenergy), but I think we’re going to see a lot of growth statewide,” said Levin. She added that significant government investment may yet be needed to meet California’s bioenergy potential.

The California Energy Commission said it has invested more than $27 million since 2007 in research and development in renewable natural gas, a common form of bioenergy that is basically methane, a particularly potent greenhouse gas. The commission said it has given an additional $77 million in taxpayer money to biomethane projects. A number of dairies in Kern County have worked with Visalia-based California Bioenergy LLC to turn several thousand cows’ manure into biomethane. And on Millux Road, Denver-based Crimson Renewable Energy LLC has a refining plant making biodiesel entirely from waste such as used cooking oil.

Last year Torrance-based Global Clean Energy Holdings Inc. bought the former, 67,000-barrel-per-day refinery on Rosedale Highway and announced a $365 million project to reopen the plant by early 2022 with about 100 employees producing 10,000 barrels per day of biodiesel from cooking oil. It said the refinery will later make the product from a ground-cover plant called camelina. The head of 155-employee Kern Oil & Refining Co., which makes renewable diesel and other fuels at its 26,000-barrel-per-day refinery near Lamont, said leveraging conventional fuel production with market knowledge has helped the company emerge as a leader in renewable fuel production.

President and CEO Jennifer Haley said she encourages policymakers to cultivate a wide-ranging energy portfolio in the state. By attracting public and private investment, she said, Kern can demonstrate that “we can both address climate change and set the table for perpetual regional economic success.”

https://www.bakersfield.com/news/bioenergy-interest-heats-up-in-kern-county/article_643feeca-6a4b-11eb-9351-b704ef9a2543.html

ELECTRIC VEHICLE FAST CHARGERS NOW AVAILABLE ON CENTRAL CA HIGHWAYS

Electric vehicle (EV) drivers now have more fast-charging options along state highways in Central California — including at the popular Tejon Pass Rest Area near the Los Angeles/Kern County line — with the installation of 22 new EV fast chargers at nine locations by the California Department of Transportation (Caltrans). “Fast chargers are essential to continue growing EV adoption in California and meeting our state’s goals for combating climate change,” said Caltrans Director Toks Omishakin. “Expanding the availability of convenient fast-charging stations along state highways is significant for the future of California transportation.”

The Level 3 DC fast chargers provide an approximate 80 percent charge in 30 minutes to EVs with fast-charging capability. The chargers have universal connectors and are able to serve all EVs on the market, including Teslas with an adapter. Charging is free with no time limit. “With four new EV fast chargers at the Tejon Pass Rest Area on Interstate 5, and 18 others staggered approximately 40 miles apart, Caltrans has reduced recharging concerns for plug-in EV drivers on long-distance trips through the Central Valley,” said District 7 Director Tony Tavares, whose district includes Los Angeles and Ventura counties.

According to the California Air Resources Board, 70 percent of California transportation sector greenhouse gas emissions come from light-duty vehicles, including passenger cars, SUVs and light-duty trucks. “This project is a tremendous example of how public agencies can collaborate with the private sector to fill gaps in the zero emission vehicle (ZEV) market,” said Tyson Eckerle, Deputy Director of ZEV Market Development at the Governor’s Office of Business and Economic Development (GO-Biz). “More chargers throughout the state will help to incentivize the purchase of EVs, getting us closer to Governor Newsom’s goal of 100 percent ZEV sales by 2035.”

The Tejon Pass Rest Area is about 60 miles north of Los Angeles and 40 miles south of Bakersfield and is a popular stopping point for drivers traveling along I-5. The four new fast chargers are located on the southbound side of the interstate. Motorists traveling north on I-5 can exit at the Lebec off-ramp to Lebec Road, which loops over the highway, to access the fast chargers, including one that is compliant with the Americans with Disabilities Act.

Other New Locations:

  • Junction Route 58/Route 184 in Bakersfield
  • Caltrans Maintenance Station on Route 41 and next to I-5 in Kettleman City
  • Caltrans Maintenance Station, 805 S. Lexington St., next to Route 99 in Delano
  • C.H. Warlow Rest Area NB/SB Route 99 in Kingsburg
  • Philip S. Raine Rest Area at SB Route 99 near Tulare
  • Philip S. Raine Rest Area at NB Route 99 near Tulare
  • Caltrans District 6 Office, 1283 N. West Ave., next to Route 99 in Fresno
  • Caltrans Maintenance Station, 125 W. Almond Ave., next to Route 99 in Madera

The $4.5 million project is funded by Caltrans and the San Joaquin Valley Air Pollution Control District in Fresno. The prime contractor is Cal Valley Construction of Fresno. BTCPower (Broadband TelCom Power, Inc.) of Santa Ana provided and installed the DC EV Fast Chargers with assistance from electrical subcontractor CSI (Civil Substations, Inc.) of Clovis. Pacific Gas and Electric and Southern California Edison are the electrical service providers. In addition to the new chargers in the Central Valley, Caltrans has six Level 3 DC fast chargers in San Diego County, two in Monterey County and one in San Luis Obispo County, and two Level 2 charging stations in Napa County and three in Contra Costa County – all available to the public.

The U.S. Department of Energy has a searchable database on public alternative fuel stations in California and nationwide. Motorists can find real-time traffic information and rest area locations at Caltrans’ Quickmap by clicking on the Options menu.    Caltrans reminds drivers to “Be Work Zone Alert” and to “Slow for the Cone Zone.”

https://www.edhat.com/news/electric-vehicle-fast-chargers-now-available-on-central-ca-highways#:~:text=Electric%20vehicle%20(EV)%20drivers%20now%20have%20more%20fast-charging,locations%20by%20the%20California%20Department%20of%20Transportation%20(Caltrans).

Record-breaking demand for warehouse and DC development

Unlike many other segments of the economy, warehouse and distribution center (DC) development is not only withstanding the widespread economic impact of COVID-19, it’s thriving. In fact: It’s red hot. Companies can’t find space fast enough and developers can’t build DCs quickly enough to meet demand. “The market is thriving, and with it, record high transaction volume (new leases, user sales and renewals), record high rents, a vacancy of 4.7%, and 42 consecutive quarters of positive absorption,” reports James Breeze, senior director, global head of Industrial & Logistics Research for CBRE.

Robust demand for industrial product has kept developers busy. “At the end of the third quarter of 2020, more than 312 million square feet was under construction [nationwide] and 37% of this was already preleased—the highest rate of pre-leasing in over a year,” Breeze exclaims. Other noteworthy trends include climbing rents, annual absorption inching close to the 200-million-square-foot benchmark, and record-high deliveries, reports Mehta Randhawa, director of U.S. Industrial Research, Jones Lang LaSalle Inc. (JLL).

As stay-at-home orders lifted, construction activity resumed, and deliveries spiked. Consequently, JLL data indicates that delivery of industrial space hit a record high in the third quarter of 2020, with completions totaling 97.4 million square feet. When all totaled, JLL expects that figure to hit 107.0 million square feet for 2020. “We have seen a speed associated with innovation that was never known to us before COVID,” remarks Matt Powers, executive vice president, JLL. “Supply chain models are being transformed in days instead of months or years.”

Driving this robust development surge is widespread adoption of e-commerce, accentuated by COVID-19. “Most consumers are not only buying more product online; they are expecting it to be delivered in a timely manner,” says Breeze. Consequently, developers are seeing upwards of five years of e-commerce growth in one year—a trend, they say, that’s not going away, Further, companies are looking to carry higher inventory levels given that many incurred lost revenues by not having the inventory to meet demand. “Beyond carrying higher inventory levels to favor resiliency over efficiency in their supply chains, companies are also considering more diversified manufacturing locations,” says Carter Andrus, president of Central Region at real estate investment trust company Prologis. “In some cases, companies have become too efficient without having some buffer or just-in-case stock for events that happen.”

Andrus observes that these two trends have the potential to generate more than 500 million square feet of additional warehouse and DC space in the next two to three years. “This is overwhelming,” he says. “In terms of facility size, we see good momentum in all size categories, although activity has been best above 100,000 square feet with pronounced strength in the big box spectrum, with that being greater than 250,000 square feet.” Earlier in 2020, Prologis saw some softness in spaces below 100,000 square feet, but now market demand for this space is also improving. All of these factors continue to shift supply chain strategies to increase distribution centers throughout the country whether it’s a company shipping directly to the consumer, or the supplier to that company.

According to the seasonally adjusted date from the U.S. Department of Commerce, U.S. consumers spent an estimate $209.5 billion online in the third quarter of 2020. That’s a whopping increase of 36.7% from the same period in 2019 when e-commerce sales made up 11.2% of total sales. Two of the biggest players in the retail world are Amazon and Walmart. Last year, Amazon was said to have over 100 fulfilment centers alone. The company typically builds fulfillment centers to feed regional sort centers as well as DCs, also known as delivery stations. Its fulfillment centers are typically 1 million-square-feet or more.

Walmart, known for running one of the largest distribution operations in the world, has over 190 DCs with more than 143 million square feet, according to global supply chain, logistics and distribution consulting firm MWPVL International Inc. “Market drivers include population growth and competition shortening the last-mile with same- or next-day delivery,” states Powers.

Robert Van Geons, president and CEO Of Fayetteville Economic Development Corp., who promotes activity in his region of North Carolina, observes how onshoring of manufacturing, increased e-commerce and drastically altered consumer demand cycles have significantly increased the demand for warehouses and DC space. “While new product is under construction, it’s nearly impossible to find a large [250,000 square feet+] quality building available between Washington, D.C. and Savanah,” Van Geons reports. “If it has good ceiling height and is close to a major interstate, it is off the market.”

https://www.logisticsmgmt.com/article/record_breaking_demand_for_warehouse_and_dc_development/warehouse