The future of industrial real estate

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By Brian Young, Senior Vice President, Managing Broker, Cushman & Wakefield | Thalhimer

The industrial building has seen significant changes over the past 15-20 years. Gone are the days of dimly lit production facilities with dirty floors filled with smoke and dust. Modern industrial facilities are clean and well lighted, and have a lot of human comforts like cafeterias, air conditioning and fitness centers.

In some markets where there is a real challenge to find developable land, developers have even turned to building multistory industrial facilities complete with parking decks and multiple-story loading for trucks. We haven’t seen this yet in Greenville/Spartanburg; however, the industrial building of the future will look much different from those in the past.

Greenville/Spartanburg has seen an expansion for both manufacturing and warehouse buildings. Decades ago, a manufacturing facility may have had hundreds of people on multiple shifts working on a production line. Today, manufacturing facilities can look more like research labs, with spotless floors, robotic arms and workers in white lab coats who watch computer screens and look for patterns in the production line.

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Old facilities might have ceilings of 14 or 16 feet; modern facilities have ceiling heights more like a basketball court at 32 or even 40 feet high.

Greenville/Spartanburg has seen a tremendous influx of new modern building construction over the past two years. Currently, there are about 7 million square feet of warehouse, distribution and manufacturing space under construction. Most of these facilities are designed to allow for tremendous flexibility and human comfort. Motion-sensitive lighting turns on and off when it senses movement, like that of a person walking. The HVAC systems allow for cross-ventilation, pulling air through the building but controlling humidity – and on cooler days, the system can even work in reverse to pull in outside air. Floors are clean and coated, which makes them easier to keep clean and swept. Many facilities also offer fitness centers and showers on site to provide employees access during lunch or early mornings.

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Another difference in recent years is the size of many new facilities. In the past six years several 1 million-plus square foot distribution centers have been constructed for household names like Adidas, Amazon, Rite Aid, Dollar Tree and TTI (Ryobi). These facilities typically have 40-foot ceiling clear height and have substantial mezzanine areas that allow for smaller pick-and-pack operations. These facilities are also extremely automated from their forklifts to conveyors making access to product stored on shelves more easily accessible. A decade ago, only a couple of centers this size existed in the entire market; currently four are under construction.

Greenville/Spartanburg is currently experiencing a renaissance. Certainly BMW, Michelin and GE have been substantial drivers of space needs and employment over the past 25 to 30 years. However, we are seeing many other industries enter the market to take advantage of the labor force, access to large population centers and access to the Inland Port. Industries include plastics, non-woven textiles, carbon fibers, auto part assembly, pharmaceuticals, online retail and even the production of kayaks. The market is poised for major growth opportunities for the next 25 years and beyond.

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