March 24, 2017
NAIOP Article Excerpt:
Today’s industrial users are looking beyond rental rates to consider transportation and inventory carrying costs when making location decisions. The era of e-commerce began unceremoniously in July 1995, when Jeff Bezos boxed up the first book sold on Amazon.com from his Seattle garage. Over time, nearly all major retailers began selling and shipping items from their own websites. This is now having a monumental impact on the way goods are created and distributed—and on the industrial real estate necessary to do so.
One such redevelopment is Northern Stacks, a mixed-use redevelopment just a few miles outside Minneapolis. Northern Stacks is a joint venture between Hyde Development and Mortenson. Hyde Development Founder and Partner Paul Hyde is familiar with the many challenges involved in redeveloping industrial sites as modern distribution facilities. According to Hyde, redevelopment of blighted sites is vital for inner-ring communities that have no land available to grow their tax bases.
According to Hyde, tenants looking to lease space in urban warehouses rarely just want to store boxes. They lease in urban locations because they value the benefits of those locations. The tenants at Northern Stacks were drawn to the site because they concentrate on servicing people living in the Twin Cities and companies doing business there. Urban warehouse tenants prefer to be near a skilled labor force and public transit, close to the interstate highway system and the downtown core, and proximate to customers, so they can reach those customers as quickly as possible.
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