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Prologis sees further tightening in logistics real estate supply

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A June research report from Prologis (NYSE: PLD) points to several supply headwinds in industrial property markets that will cause new asset completions to lag behind demand over the next decade.

The research arm of the San Francisco-based logistics real estate mutual fund said land shortages, additional building needs, increased replacement costs, and approval issues are some of the reasons supply remains tight and rents will continue to rise.

Few places available in urban areas

Industrial land in densely populated areas is scarce.

Decades of renovation efforts in large metropolitan areas have resulted in areas being converted from industrial uses to offices and apartments. Warehouses have also grown in size, moving from warehouse centers to high-turnover facilities, both of which require more space.

The report found that buildings constructed after 2000 were 55% larger and took up 66% more land than those constructed in the 1980s and 1990s.

The population growth beyond the city centers as well as regulatory constraints have led to more logistics space being developed outside of metropolitan areas. As a result, the delivery distance from logistics facilities to consumers has increased over time.

Diagram: Prologis

But the need to be closer to the buyer is growing as more operators look for space on the last mile in densely populated areas to shorten delivery times. This has put pressure on the value of urban logistics space.

Without additional space in these markets, there is essentially little competition that will keep rents inflated. If space is available in the right place, users are willing to overlook functional limitations, the report says.

“Together, these trends have reduced the price sensitivity of users for buildings in good locations or with the latest building design features, which has led to higher rents.”

Retail property remodeling is unlikely to help

Prologis does not expect that converting shuttered retail properties into logistics facilities will resolve supply issues.

According to the report, retail properties tend to be converted to more economically sensible uses, such as apartments, which have higher and better usage. In addition, development issues and community opposition pose hurdles, along with the fact that most retail spaces are difficult to remodel to handle high throughput and associated trucking.

Prologis Research expects only 50 to 100 million square feet to move from retail to logistics over the next decade. That is less than 3% of the logistics space that was added in a normal year.

Replacement costs increase due to several factors

The rise in land prices, as well as material and labor costs, has kept asset replacement costs ahead of inflation over the past decade. Spikes in land values ​​were most common in coastal markets and densely populated areas.

The cost inflation of materials and labor has been more pronounced since the beginning of the pandemic and is currently supply-dependent. The production of many construction-related materials and products was taken offline during the pandemic and producers are still catching up. In addition, incentive payments and improved unemployment benefits have created labor difficulties in many industries, including construction and warehousing.

Prologis Research estimates that replacement costs have increased nearly 60% in the past five years and by 15% in 2021.

Diagram: Prologis

The report pointed to other reasons for the tension in the logistics labor market.

The increase in e-fulfillment businesses, which require three times as many staff as traditional warehousing and have a turnover rate four times as high, remains headwind. In addition, with the rise of warehouse automation and technology, the demand for skilled labor has increased as many facilities now require more engineering-level jobs.

Outside of large, densely populated metropolitan areas, more and more institutions are going online and have a smaller, sometimes less skilled workforce. In addition, the bundling of logistics facilities further reduces the labor supply.

The report says more worker-friendly facilities are key.

“A healthy and sustainable work environment can give employers an advantage in attracting and retaining talent. Accelerated by the pandemic, facility improvements that focus on worker wellbeing, such as the WELL standard, are becoming increasingly popular. This certification combines strict requirements in areas such as indoor air quality, water quality, natural light and thermal comfort as well as nutrition, exercise opportunities and mental health. “

In addition, improving the technical capabilities of new facilities can help alleviate supply problems.

“Most modern systems meet the requirements for flexible automation, but certain features can be made even more automation-friendly. Increased power capacity, additional space to recharge mobile technologies, access to high-speed data, soil quality, strong canopy and increased headroom can all accommodate technologies that are used to increase staffing requirements, increase operational visibility and control risk. “

However, the report concluded that structural changes in property development “are likely to continue to limit the amount of new supply to meet future needs of users in the supply chain”.

“The rapid development of consumer habits, labor demand and technology are better than ever and have increased the benefits of securing properties that are best suited to house the supply chains of the future, while scarcity increases occupancy and rents across the board Range of logistics properties has increased. “

Prologis Ventures is an investor in FreightWaves.

Click here to see more FreightWaves articles by Todd Maiden.

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The JOLT Real Estate Report for June 6-12, 2021 | The JOLT

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This weekly report covers sales of single-family homes in Thurston County for the past week.

98 sales were completed from Sunday June 6th through Saturday June 12th 2021. The average sales price for these properties was $ 465,000, or $ 270.39 per square foot.

The average length of stay for these objects was 8.34 days, of which three objects were on the market for 50 or more days.

Without these three properties, the other 95 houses were on the market for an average of just 5.85 days.

CITY / address bed bath Square feet $ / Square foot Selling price
LACEY
7825 Greenview Dr. NE 4th 3.00 2,990 $ 267.54 $ 799,950
7541 50th Avenue NE 4th 2.50 2,682 $ 272.18 $ 730,000
4452 Campus Dr. NE 3 2.25 2.406 $ 286.78 $ 690,000
4073 Cameron Lane NE 4th 3.25 2,736 $ 208.33 $ 570,000
9541 28 3 2.50 2,190 $ 247.91 $ 542,931
2506 Greenlawn St SE 4th 2.50 2,871 $ 185.30 $ 532,000
2815 Kacie Ct NE 4th 2.50 2,297 $ 231.17 $ 531,000
7121 insert St SE 3 2.50 2,521 $ 206.27 $ 520,000
8624 Adonis Avenue NE 4th 2.50 2.157 $ 238.29 $ 514,000
3912 Willows Campus Lp NE 4th 2.50 2,520 $ 201.19 $ 507,000
3505 Barklay Dr. NE 3 1.75 1,850 $ 270.27 $ 500,000
7940 8th Avenue SE # 41 4th 2.50 2,328 $ 214.47 $ 499,296
4540 Stonegate St SE 4th 2.25 1.956 $ 253.07 $ 495,000
1901 Sycamore St SE 3 1.5 2,000 $ 245.00 $ 490,000
1901 Diamond Lp SE 4th 2.5 2,281 $ 214.82 $ 490,000
8345 Bainbridge Lp NE 2 1.75 1,393 $ 333.81 $ 465,000
3323 Nova St NE 3 2.5 1,704 $ 271.13 $ 462,000
5018 Andrew Street SE 4th 2.5 1,876 $ 245.20 $ 460,000
534 Kenneth Ct SE 3 2 1,596 $ 280.70 $ 448,000
9410 Bowthorpe (Lot 244)) St S 2 2 1,648 $ 268.39 $ 442,304
5617 Mount Rainier St SE 3 2.25 1,602 $ 268.41 $ 430,000
3325 Stanford Ct SE 3 2 1,236 $ 343.85 $ 425,000
7633 Rushmore Wy NE 3 2.5 1,509 $ 275.02 $ 415,000
5819 Vermont Avenue SE 3 2.25 1,395 $ 290.32 $ 405,000
5645 54th Avenue SE 3 1 1,048 $ 352.73 $ 369,660
9039 Deni Dr. NE 3 2 1,372 $ 266.03 $ 365,000
6115 Balboa Lane SE 3 2.5 1,361 $ 268.19 $ 365,000
5648 Waldron (Lot 1613) Dr. NE 3 2.50 2,505 $ 305.77 $ 765,948
OLYMPIA
5524 Brennerstrasse NW 3 2.75 2,932 $ 375.17 $ 1,100,000
7716 Ostrander Ct SE 4th 3.50 3,960 $ 240.15 $ 951,000
1639 Summit Lake Shore Road 2 2.25 2.154 $ 428.97 $ 924,000
6427 Cooper Point Rd NW 3 3.00 2,874 $ 311.06 $ $ 894,000
6212 78th Avenue NE 3 2.50 2,787 $ 298.53 $ 832,000
4027 Birkdale Lane SE 3 2.50 2,703 $ 306.88 $ 829,500
4636 Gifford Road SW 3 2.50 2,456 $ 321.66 $ 790,000
3924 Prestwick Lane SE 3 2.50 2,629 $ 296.65 $ 779,900
8544 44th Avenue NW 4th 2.75 2,962 $ 254.90 $ $ 755,000
4509 90. Wy SE 4th 2.50 3,267 $ 229.57 $ 750,000
11828 Parkview Ct SW 3 2.50 2,280 $ 296.05 $ 675,000
3139 Lindell Rd NE 3 2.50 2,661 $ 248.03 $ 660,000
5621 93rd Avenue SE 3 2.00 1,850 $ 351.35 $ 650,000
6511 Canyon Ct SW 3 2.75 1,896 $ 340.19 $ 645,000
5209 81st Avenue SE 4th 2.50 2,496 $ 250.40 $ 625,000
9639 Old Autobahn 99 SE 3 1.75 1,644 $ 363.75 $ 598,000
7310 Libby Rd ​​NE 3 2.00 1,344 $ 427.83 $ 575,000
3981 Pifer Rd SE 2 2.00 2,079 $ 266.96 $ 555,000
6739 Libby Rd ​​NE 3 2.00 1,598 $ 344.18 $ 550,000
8510 Rocky Lane SE 4th 2.00 2,999 $ 183.39 $ 550,000
2824 Acacia Ct SE 3 2.00 1,716 $ 314.69 $ $ 540,000
7144 Cavalier Lp SW 3 2.50 2,031 $ 260.96 $ 530,000
2636 18th Avenue NE 3 2.50 2,019 $ 262.51 $ 530,000
920 Sarah Ct NW 4th 2.5 2.136 $ 223.31 $ 477,000
1300 Scenic Ct SE 3 2.5 2.136 $ 220.04 $ 470,000
3317 Gonzaga Ct SE 3 1.75 1,530 $ 302.61 $ 463,000
5039 Madison Heights CT SE 3 2 1,444 $ 318.56 $ 460,000
7713 Rainier Avenue SE 2 2 1,944 $ 234.05 $ 455,000
3411 Hoadly St SE 2 2 2,442 $ 185.09 $ $ 452,000
5034 Chambers Creek LP SE 3 2.75 1,541 $ 288.77 $ 445,000
307 Messenger Ct SE 3 1.75 1,400 $ 314.29 $ $ 440,000
8634 35th century SE 3 1.75 1,748 $ 250.57 $ 438,000
1324 Clover St NE 3 2 1,874 $ 229.46 $ 430,000
441 Ranger Dr. SE 4th 1.75 2.144 $ 198.23 $ 425,000
8515 Sweetbrier Lp SE 3 2 1,680 $ 252.98 $ 425,000
729 Cottonwood Ct SE 3 1.75 1,508 $ 278.51 $ 420,000
1405 Alki St NE 3 2 1,412 $ 297.45 $ 420,000
407 Division St. 2 1 1,092 $ 375.46 $ 410,000
3617 Landau Ave NE 3 1.75 1,388 $ 288.15 $ 399,950
719 Kinwood Ct SE 3 1.75 1,098 $ 336.98 $ 370,000
1004 McCormick St NE 2 1.75 1,024 $ 355.47 $ 364,000
3523 Harvard Dr. SE 2 1.5 1,224 $ 290.03 $ 355,000
5110 Boston Harbor Rd NE 3 0.75 1,828 $ 153.17 $ 280,000
7042 Old Olympic Highway NW 1 1 640 $ 399.22 $ 255,500
RAINIER
16825 Reichelstrasse SE 3 2.50 2,736 $ 341.74 $ 935,000
16145 Reichelstrasse SE 4th 3.00 2,557 $ 307.00 $ 785,000
416 Easy St SE 3 2 1,874 $ 232.66 $ 436,000
719 Tipsoo Lp p 3 2 1,260 $ 309.52 $ 390,000
340 Briar Lane S # lot25 3 2 1.618 $ 210.14 $ 340,000
TUMWATER
401 Blass Avenue SE 4th 2.25 2,800 $ 206.70 $ 578,772
908 Cathy Ct SE 3 1.5 1,536 $ 292.97 $ 450,000
2504 Silver Lane SW 3 2.5 2.148 $ 206.01 $ 442,500
716 Dennis St SW 3 1.75 1,414 $ 311.17 $ 440,000
1626 Sundrop Lane SE 3 2.5 1,758 $ 231.51 $ 407,000
YELM
15420 SE Sunnyside Lane 4th 2.50 2,530 $ 290.51 $ 735,000
16946 156. Lane SE 3 2.50 1,992 $ 277.36 $ 552,500
9964 Justman St SE 4th 2.50 2,669 $ 185.46 $ 495,000
14968 101st Avenue SE 5 2.5 2,303 $ 208.42 $ 480,000
16144 Achat Str.SE 4th 2 2,060 $ 225.73 $ 465,000
9205 Carys St SE 4th 2.5 2,208 $ 208.33 $ 460,000
14969 101St Avenue SE 4th 3 2.142 $ 210.08 $ 450,000
10005 Cole Ct SE 4th 2.5 2.120 $ 212.26 $ 450,000
9101 Thea Rose Dr. SE 5 3 2,500 $ 180.00 $ 450,000
16657 Grünblattallee SE 3 2.5 1,766 $ 254.25 $ 449,000
10003 Tahoma Ct SE 4th 2.5 2.006 $ 204.39 $ 410,000
17721 Clearlake Blvd SE 3 2.5 1,740 $ 229.89 $ 400,000
9830 Ramsay Dr. SE 3 2.5 1,841 $ 215.92 $ 2nd $ 397,500
16229 Prairie Creek Lp SE 3 2.5 1,416 $ 268.36 $ 380,000
10008 suit St SE 3 2.5 1,413 $ 261.85 $ 370,000
16705 Wanda Ct SE 3 1.5 1.008 $ 337.30 $ 340,000

For more information on real estate in Thurston County, contact Kristy Woodford on 360-508-2800 at Holistic Home Group at Keller Williams South Sound 360-786-6900. Or email her at KWoodford@kw.com

The sales price development can be seen in this diagram:

Thurston County
Median sales prices
Week ends
Selling price
June 12 $ 465,000
June 5th $ 470,000
May 29th $ 475,000
May 22 $ 467,125
May 15 $ 450,500
8th of May $ 470,000
1st of May $ 440,000
April 24th $ 439,375
17th April $ 444.502
10th of April $ 434,950
3rd of April $ 478,414
27th of March $ 444,000
March, 20th $ 430,000
March 13th $ 425,799
6th March $ 430,000
27th of February $ 440,000

20. February

$ 433,950
13th February $ 414,750
February 6th $ 440,500
January 30th $ 385,837
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LA Real Estate Firms Are Making Deals Outside California

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CGI sold the Astoria on Celebration for $ 74.5 million.

Los Angeles real estate companies are paying attention to more dispersed markets and doing business outside of California, from Provo, Utah to Orlando, Florida.

In the past few weeks, two Westside companies have made major acquisitions.

Santa Monica-based MJW Investments bought a student residence at Brigham Young University, Utah. The price was not disclosed.

MJW acquired the 154-unit, 924-bed community in partnership with Redstone Residential Inc. of Provo, Utah.

With the acquisition, MJW now has more than 7,000 student residences in the United States.

Amenities at the property near BYU include a hot tub, sand volleyball court, pool, and on-site laundry facilities.

It is MJW’s sixth acquisition in this area.

In March, the company, together with Redstone Residential and Venice-based MHE Enterprises Inc., acquired a 1,156-bed student residence nearby.

In the recent acquisition, MJW plans to spend cash on the units and amenities to make it a more desirable property. Redstone Residential will oversee renovations and property operations.

“The close proximity to campus and the remarkable offerings are just some of the things that make this property incredibly attractive,” said Mark Weinstein, President and Founder of MJW Investments, in a statement.

“This means that our acquisitions will reach more than 2,000 beds in Provo in 2021. We are excited to bring a new living experience to the students at BYU and we are incredibly confident that once our capital projects are completed, this will be an enhanced living experience for the students, ”he added.

Voya Investment Management funded debt for the acquisition.

Further south, BH Properties, based in Sawtelle, acquired a retail center in Plano, Texas on June 1 for an undisclosed price.

Known as Preston Shepard Place, the property has 361,780 square feet of retail space on 31 acres. The center was built in 1995 and has Marshalls, Burlington and Tuesday Morning among its anchor businesses.

Only 55% of the location was rented when it was closed.

“Preston Shepard Place is an underutilized retail location poised for a surge in lease and traffic,” said Scott Henry, director of acquisitions at BH Properties, in a statement.

“With 163,002 square feet of vacancy, we have plenty of runway to generate future cash flow growth. We plan to accommodate a large number of retailers by spreading the larger vacancies across smaller spaces. The busy location and wealth dynamics offer the opportunity to achieve significant growth in NOI (Net Operating Income), ”he added.

From 2008 to 2018, the center was 94.4% occupied, according to BH Properties. According to the company, the current low occupancy rates are due to corporate insolvencies in private customer business.

The transaction marks BH Properties’ first retail deal of the year.

While other local businesses are adding assets, Woodland Hills-based CGI Real Estate Investment Strategies is giving up some properties in other states.

The company announced on June 3 that it had sold Astoria to Versity Investments at Celebration in Celebration, Florida for $ 74.5 million.

The property has 306 luxury apartment buildings spread over six four-story buildings with a central clubhouse and pool.

The property was built in 2016 before being vacated in 2017 due to construction issues. CGI acquired the vacant community in 2019 for $ 43 million and brought the property up to date. At the time of sale to Versity Investments, the property was 99% let.

“Our history as a fundamental developer has given us both the experience and confidence that we can take on a massive challenge like Astoria and turn it into a resort-style Class A facility,” said Gidi Cohen, CEO of CGI in an opinion.

“Having successfully restored the property to optimal condition and the Orlando market continued to pick up, we were able to exceed our business plan in record time,” he added.

CGI assumes that the property will develop well in the future.

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North Texas real-estate agent faces added charge in U.S. Capitol riot

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A Tarrant County real estate agent accused of entering the U.S. Capitol during the January 6 riot is charged again with involvement in violence during the riot, according to court records.

Katherine Staveley Schwab “intentionally and knowingly engaged in an act of physical violence” at the Capitol, according to court files filed last week.

Schwab, 33, had previously been charged with knowingly entering or staying in a restricted building or site without legitimate authority; and disorderly behavior on the Capitol grounds.

The new indictment was first reported by the Dallas Observer.

Schwab’s lawyer did not immediately respond to phone and email requests for comment. A phone number listed in Schwab’s name has been disconnected.

Katherine “Katie” Schwab, right.(FBI)

The indictment is the latest in a growing list of criminal charges against Texans related to the riots that broke out as Congress worked to confirm Joe Biden’s win in the 2020 presidential election.

Donald Trump falsely claimed victory and in a speech that day called on a crowd to march to the Capitol. Forty-five Texans were charged in connection with the riot, according to a review by the George Washington University Extremism Program.

The FBI said Schwab admitted to having flown a private plane to Washington with four other people the day before the uprising. On January 6, Schwab and the group listened to speakers near the White House before heading to the Capitol at around 10:30 a.m.

FBI agents said Schwab told them nothing was happening in the Capitol and some members of the group decided to go to the hotel, according to court records. There Schwab saw on the news that the Capitol had been violated, court records show. Schwab told authorities they had decided to bring an Uber back to the Capitol.

She told the FBI that she noticed there were some “bad apples” in the crowd.

“Although Schwab saw neither violence nor anyone who destroyed anything, she saw the door to the Capitol being destroyed,” an FBI agent wrote in Schwab’s criminal complaint. “Schwab said the crowds pushed her through the original doors into the building and into a lobby area.”

Schwab said she felt overwhelmed by the crowds. A Capitol police officer indicated an exit to her, according to the display.

Schwab was eventually arrested along with two other members of the group that flew the plane to Washington – Jennifer Ryan and Jason Hyland.

The newly submitted court files do not contain any information about the violence in which Schwab is involved. But a Ryan attorney, Guy Womack, said the government contacted him about the new charge and told him the same charge did not apply to Ryan.

“They claim that Ms. Schwab did something violent,” said Womack. “I think they accuse her of kicking a camera. It doesn’t sound like a very violent act, the little bit they told me. “

Womack said Ryan and Schwab only entered the Capitol even though there were violent people in the crowd who broke windows, broke into the office of House Speaker Nancy Pelosi and clashed with police.

“Hundreds of the defendants in this case should not be sentenced to prison for entering the Capitol,” he said. “The people at the front pushed their way through and some broke windows. It’s criminal activity – you can’t break a window in the U.S. Capitol. … But the overwhelming majority of people did not go into a private area at all. “

Womack said Ryan was “only there as an interested American citizen who wanted to see what the process was like”.

The US Press Freedom Tracker, which maintains a database of incidents of violence against journalists, reported several incidents of violence against the news media during the riot. Outside the Capitol, rioters stormed television crews and destroyed their equipment.

The day after the uprising, the real estate agency Schwab worked for said she was “no longer affiliated with the company.”

Five people died during or shortly after the riot, including Ashley Babbitt, who was shot and killed by law enforcement while trying to enter a restricted area.

According to her criminal complaint, Schwab referred to the shooting in a Facebook post.

“After the girl was shot,” she wrote, “then we untied all hell.”

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