Wednesday December 30, 2020

Raleigh-Durham Officials Seek to Capitalize on Surging Demand for Industrial Space

From the Triangle Business Journal:

RALEIGH-DURHAM OFFICIALS SEEK TO CAPITALIZE ON SURGING DEMAND FOR INDUSTRIAL SPACE 

With Covid-19 keeping many shoppers online and out of brick-and-mortar stores, the e-commerce opportunities are growing in North Carolina. And that could mean jobs in 2021.

That’s according to multiple economic developers who say there’s major opportunity when it comes to the distribution centers and warehouses needed to support the surge in e-commerce amid the pandemic. Both communities and companies are taking bets that the trend could pay dividends in North Carolina.

[…]

Both Johnson and Smith said the lack of available and existing buildings had been limiting. But that’s where developers come in, such as Justin Parker, Raleigh market leader for Ohio-based Al. Neyer. The firm has an existing spec warehouse business park in Garner and has active plans for others in the Triangle. Recently, Al. Neyer optioned a 47-acre site in western Orange County in the hopes of building a pair of spec warehouse facilities totaling more than 600,000 square feet.

“We are certainly bullish on the industrial space in the Triangle … and that is evidenced by our willingness to develop spec projects,” he said. Parker said the industrial market was strong leading into the pandemic, as one of the key drivers is population growth. Add in the pandemic, and the space becomes even more attractive.

“We were already clicking online to order stuff … that’s only accelerated in the pandemic,” Parker said. “We’ve absolutely seen increased demand for ecommerce, for warehouse and distribution space just across the market.”

That’s why companies like Al. Neyer are taking big bets on industrial projects – even before tenants actually sign on.

So far, it’s been a winning strategy for many. Al. Neyer, for example, bet big on Garner for its first project, starting it speculatively in 2019 before any tenants had signed on. By the time it was complete, it was 100 percent leased, led by Lowe’s Home Improvement (NYSE: LOW).

“Successes like that in the market further strengthen our belief in the market,” he said.

Read the full piece in the Triangle Business Journal here.

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