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Warehouse employment is at an all-time high

Source: Supply Chain Dive

Warehouse employment has surpassed its pre-pandemic level to reach the highest level ever recorded with 1.25 million workers in the warehouse and storage sector in September, according to preliminary numbers from the Bureau of Labor Statistics.

This bounce-back comes as employment remains below what it was in early Q1 of this year. Overall unemployment dropped to 7.9% in September, which is much lower than the 14.7% seen in April but higher than the 3.5% seen in February.

Warehouse employment has reached a new peak as e-commerce sales are higher than any previous point in time, according to the latest Census data. E-commerce sales jumped almost 32% from Q1 to Q2 to reach nearly $212 billion.

In this sense, the pandemic has simply sped up trends surrounding e-commerce that were already taking place, according to Zachary Rogers, an assistant professor of supply chain management at Colorado State University. Companies that were struggling continued to struggle, while businesses that were improving have gotten better more quickly. E-commerce is the epitome of this trend, Rogers said.

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E-Commerce Tenants Continue to Lease Industrial Space as the Holiday Season Approaches

Source: National Real Estate Investor

Anticipating a surge in online shopping during the holidays, e-commerce tenants are already prepared to handle the swell in orders, having locked in additional industrial space during the second and third quarters, according to Steve Schnur, executive vice president/COO at Indiana-based industrial REIT Duke Realty.

Online retail sales increased a whopping 30.1 percent during the first six months of the year, compared to the same period in 2019, from $266.84 billion to $347.84 billion, according to Digital Commerce 360 analysis by the U.S. Department of Commerce data.

Online shopping is expected to jump even more during the holidays, with software company Salesforce predicting that as much as 30 percent of all global retail sales will conducted online during the 2020 holiday season. A Statista survey found that nearly half of U.S. consumers plan to shop online during the period, reports Finch. What happens in the November election and whether there will be a new government stimulus package before the end of the year will also have an impact on online holiday sales, according to Pete Quinn, national director for industrial with real estate services firm Colliers International.

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Industrial Net Absorption Has Risen 51% So Far This Year

Source: Globe Street

While the US economy has dangerously slumped for much of the year, demand for industrial space has only continued to increase.

Net absorption for bulk industrial space was up 51% to 79.8 million square feet in the first half of the year, according to Colliers. At mid-year 2019, 52.8 million square feet had transacted.

The pandemic drove these gains as e-commerce surged in the first half of the year. E-commerce accounted for 16.1% of retail sales in Q2 2020, which was an increase over the 11.8% in the previous quarter, according to the US Department of Commerce. That was a record for online shopping.

Overall, the industrial market posted 104.5 million square feet of occupancy gains at mid year 2020. The Big box segment claimed 79.8 million square feet, which was 76.3% of all net absorption in 2020.

As other commercial real sectors struggled in the first half of the year, vacancy, transaction volume and product under construction remained relatively flat across the country for bulk industrial space. According to Colliers, asking rents and net occupancy surged in the sector during the first half of 2020.

Cap rates were at a steady 5.6% midyear, while the industrial sector was the only CRE asset class to positive year-over-year growth at midyear, according to Real Capital Analytics. New development is also flourishing in the sector, with 170.7 million square feet under construction at the end of the second quarter of 2020.

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Metro Atlanta Industrial Park Trades for $12M

Source: Connect Media

JLL has arranged the $11.6 million sale of Plaza 85 Business Park, a nine-building industrial, office and flex park totaling 191,526 square feet within a Qualified Opportunity Zone in the Metro Atlanta community of Norcross.

Located on nearly 14 acres at 5970-6040 Unity Drive in the Northeast Atlanta Industrial submarket, the industrial park is home to 31 tenants and features clear heights ranging from 12 to 18 feet, both dock-high and drive-in doors and a combination of rear- and front-loading configurations.

Dennis Mitchell, Matt Wirth, Britton Burdette and Crosby Taylor of JLL represented the seller, Sperry Equities, in the transaction. The buyer was Atlanta-based WePartner.

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Atlanta-area flex park sells for $11.65M to local buyer

JLL Capital Markets closed the sale of the 9-building office and industrial park in Norcross to WePartner 

Source: JLL

 JLL Capital Markets announced today that it has closed the $11.65 million sale of Plaza 85 Business Park, a nine-building industrial, office and flex park totaling 191,526 square feet within a Qualified Opportunity Zone in the Atlanta-area community of Norcross, Georgia.

JLL worked on behalf of the seller, Sperry Equities. Atlanta-based WePartner purchased the asset.

Plaza 85 Business Park is home to 31 tenants and features clear heights ranging from 12 to 18 feet, both dock-high and drive-in doors and a combination of rear- and front-loading configurations. The park is situated on 13.8 acres at 5970-6040 Unity Drive in the Northeast Atlanta Industrial submarket, Atlanta’s most infill industrial submarket. Additionally, the park is directly on and has immediate access to Interstate 85, the industrial backbone of the Southeast. This last-mile location allows tenants to access more than 3.8 million people within a 30-minute drive.

The JLL Capital Markets team representing the seller was led by Dennis Mitchell, Matt Wirth, Britton Burdette and Crosby Taylor.

“As companies compete on the e-commerce battlefield, proximity to the customer base has become one of the most effective ways to cut down on shipping costs and delivery times,” Mitchell said. “The convergence of last-mile connectivity, highly affluent suburbs and interstate access makes this a highly desirable location.”

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment advisory, debt placement, equity placement or a recapitalization. The firm has more than 3,700 Capital Markets specialists worldwide with offices in nearly 50 countries.

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President Sim Doughtie Featured in Atlanta Business Chronicle: E-commerce is Fueling Atlanta’s Industrial Market

Source: Atlanta Business Chronicle

There is no question that the Atlanta industrial market is on fire. According to King Industrial Realty’s internal market research and tracking data, 57 million square feet of industrial space was leased or sold between Q3 2019 and Q2 2020. This boom in activity was led in part by Covid-19 and the stay-at- home mandates pushing more online purchases, with more people than ever before enjoying the safety and convenience of virtual shopping.

As reported in the National Real Estate Investor, data from the U.S Census Bureau shows e-commerce sales accounted for 16.1% of total retail sales in the second quarter of 2020. On a non-adjusted basis, the estimated second quarter total for U.S. e-commerce sales was $200.7 billion, an increase of 37.0% from the first quarter and up 44.5% year-over-year.

Amazon has been leading the charge in this leasing activity, occupying an estimated 13 million square feet across Atlanta. The latest deals include 1 million square feet in Coweta County, 1.1 million in Hall County, three facilities totaling 2.6 million in Fulton County, 1 million in Jackson County, and 700,000 square feet in Gwinnett County. There is also some speculation that Amazon is interested in a new 121,017-square-foot delivery facility in Dekalb County.

Amazon isn’t alone though. Home Depot has announced that it will open three new distribution facilities in Atlanta, employing 1,000 people, with the first being a 657,600-square-foot center in Henry County. Other notable transactions this past year include Goodyear Tire & Rubber’s new 1,492,360-square-foot facility, Post Consumer Brands taking on 959,722 square feet, Mondelez Global adding 570,988 square feet, and Fr8 Auctions’ new 527,000-square-foot facility.

At first glance, all this growth would appear to be a good problem, but 2020 has been anything but typical, and the rapid expansion during a global crisis has not come without some issues.

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DHL eCommerce Solutions picks Atlanta for first fully-owned U.S. distribution center

Source: Atlanta Business Chronicle

A division of DHL is making a permanent move onto UPS’ home turf, picking Atlanta as the site of its first fully-owned U.S. distribution center.

DHL eCommerce Solutions, a division of Deutsche Post DHL Group, purchased a 150,000-square-foot facility at 1370 Discovery Industrial Court in Mableton, between I-285 and I-20.

The German logistics company will relocate from 1500 Southpoint Drive, Suite 200, in Forest Park, a location they’ve rented since 2004.

“It is an extremely proud moment for us to move to our first fully-owned U.S. building located in Atlanta,” said DHL eCommerce Solutions Americas CEO Lee Spratt. “Our expansion plans have been in the works for some time, but with this year’s consistent surge in e-commerce volumes, we understood the urgency of finalizing our plans to have a permanent home in the Atlanta area and additional space in strategic metropolitan U.S. locations.”

The new facility is part of an approximately $30 million investment to expand and modernize its operation in the United States. The includes adding temporary distribution center space in Chicago, Los Angeles, and Avenel, N.J., and hiring 900 new distribution center workers.

DHL said it plans to nearly double its current Atlanta staff of 229 by the end of the year. The 225 new part- and full-time openings will be for encoders and sorters.

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E-commerce giant Radial Inc. to invest $40M in new Henry County fulfillment center

Source: Atlanta Business Chronicle

Radial Inc., an international e-commerce company based in Pennsylvania and Amazon’s biggest competitor, will invest $40 million to open a new fulfillment center in Locust Grove, Ga. The center is expected to create 344 full-time job opportunities and more than 1,000 seasonal opportunities, according to a news release from the governor’s office.

Radial’s new fulfillment center will help support a nationally recognized health and beauty brand. The governor’s office did not identify the brand in the release. The company also has a fulfillment center in Buford, Ga., according to its website.

Cushman & Wakefield arranged the 760,608-square-foot lease on behalf of the landlord Scannell Properties with Radial. The new center is in Phase I of Gardner Logistics Park in Locust Grove in Henry County. Locust Grove is about 36 miles southeast of downtown Atlanta.

The building is located at 3150 Highway 42 and totals just over 1 million square feet with 251,299 square feet remaining, according to Cushman & Wakefield. Radial will join The Home Depot and Love’s Travel Stops’ new Southeast retread tire manufacturing facility at Gardner Logistics Park.

Radial, considered a major competitor of Amazon, is an omnichannel commerce technologies and operations company. Omnichannel technology is the seamless integration of several channels across different platforms to provide an easy customer experience for those shopping on a laptop or mobile phone or brick-and-mortar store.

Belgian postal service bpost bought Radial, the former eBay Enterprise fulfillment operator, for $820 million in 2017.

Radial currently handles online orders for e-commerce companies and retail chains such as Dick’s Sporting Goods Inc., Aéropostale Inc., PetSmart, Spanx, Designer Shoe Warehouse and Everlast, according to its website.

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Amazon To Build 1,500 New Last-Mile Warehouses In Arms Race With Walmart

Source: BISNOW

Amazon could be looking to add comprehensive last-mile warehouse coverage to major markets on a heretofore unheard-of scale.

Having largely recovered from the shipping delays precipitated by the outbreak of the coronavirus, Amazon is on a quest to open as many as 1,500 smaller-format distribution centers in urban and suburban markets, Bloomberg reports. Called “delivery stations,” these 200K SF facilities would be around a quarter of the average size of Amazon’s “fulfillment centers” that tend to be in more traditional industrial areas.

Amazon’s real estate frenzy is already well underway, and it goes beyond distribution centers. In September alone, the company estimates it will open 100 new facilities, between warehouses, offices, data centers and retail concepts. In Q3 2019, the company reported a 26% year-over-year decline in profits and attributed it to prodigious spending on its last-mile network.

Part of Amazon’s voracious appetite for last-mile space comes from its desire to make one-day delivery the new standard for Amazon Prime members, and to up the ante to same-day delivery where possible. After that initiative was derailed by the combination of coronavirus-related work restrictions and lockdown-driven e-commerce growth, Amazon believes it is back on track in shrinking its delivery expectations, Bloomberg reports.

The urgency in achieving that higher standard comes in part from competitors like Walmart (and to a lesser extent, Target) improving at leveraging their physical store footprint to make same-day deliveries. Without that retail infrastructure, Amazon is attempting to compete by using the disappearance of big-box retailers to its advantage.

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