Going up – The trend toward high-rise logistics centers

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Hello everyone,

It may have come as a surprise when it was learned that Nevada-based developer Dermody submitted plans for a five-story logistics center at the General Motors Boxwood site.

Dermody and locally-based Harvey, Hanna and Associates earlier announced the sale of a large chunk of the former GM plant site. Dermody is buying a large portion of Boxwood with locally-based Harvey, Hanna keeping the remainder.

The plant site is being razed after it was determined that there was no chance that large-scale manufacturing could return to the site off Route 141 in the Prices Corner-Newport area.

It turns out that multi-story sites are becoming an increasingly compelling option in and around urban areas.

The Fortune 500 commercial real estate firm JLL laid out the case for multi-story distribution centers in a recent report.

According to the report, 2017 proved to be a pivotal year with a push toward same-day delivery in the U.S.Until that time, the preferred footprint was a low-rise facility.

The above-mentioned centers are capable of filling some same-day orders but can struggle with congestion. A multi-story center a half an hour closer to an urban area makes same-day delivery more feasible. An example, cited by JLL is a multi-story complex in Brooklyn, NY.

So why not build high-rise centers in Philadelphia? It will happen, but a hefty wage tax, neighborhood concerns, labor issues and the multi-year task of developing brownfield sites are factors that can stymie such projects.

One piece of good news for the Delaware economy is that a multi-story logistics center will leave a large chunk of the Boxwood site available for future development.

A Boxwood complex with a couple of tenants would limit the ability of businesses to take advantage of future trends that could come in manufacturing or other areas.

Worth noting is a story in this newsletter on former DuPont CEO Ellen Kullman taking the top post at Carbon, a Silicon Valley company with exciting 3D printing technology that could make its way to the shop floor.

Here’s to a productive Monday during a shortened workweek for some of us.

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