September 19, 2019

Developers building multi-story DCs for urban home delivery

Amazon effect drives demand for new breed of warehouse, Innovo and Prologis say at CSCMP Edge.

By DC Velocity Staff

The imperative to provide speedy home delivery for e-commerce orders is driving demand for multi-story distribution centers in dense urban areas, despite the sky-high rents, panelists said Tuesday at the CSCMP Edge annual conference in Anaheim, California.

The high cost of real estate in cities compared to distant, rural areas had discouraged this trend until recent years, when the "Amazon effect" began to drive retailers to find ways to move their product closer to consumers, panelist Andrew Chung, CEO of Innovo Property Group, said in a session titled "Over-Simplified: Multi-Story and Urban Infill Distribution Centers—There's no Template."

In response, real estate developers are building projects that would have been inconceivable in past years, featuring truck ramps reaching second-story DCs and high-speed freight elevators to bring inventory even higher. Innovo is now developing two million square feet of such DCs in the New York City metro area, while fellow developer Prologis recently completed one in Seattle.

Warehouse designers must get creative to make these projects work, since there is no template for the best way to build a profitable, multi-story DC, the panelists said. In fact, Prologis refers to its nascent Seattle building as "an R&D project," panelist Kim Snyder, president of Prologis, said.

In addition to finding ways to help 53-foot trucks reach the second floor of an urban building, additional challenges include: packing enough inventory density into the space, providing rare parking spaces for warehouse laborers, and setting strict limits on delivery territory for each facility, the panelists said.

Resources Mentioned In This Article

Material Handling Videos

Join the Discussion

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.

Subscribe to DC Velocity

Feedback: What did you think of this article? We'd like to hear from you. DC VELOCITY is committed to accuracy and clarity in the delivery of important and useful logistics and supply chain news and information. If you find anything in DC VELOCITY you feel is inaccurate or warrants further explanation, please ?Subject=Feedback - : Developers building multi-story DCs for urban home delivery">contact Chief Editor David Maloney. All comments are eligible for publication in the letters section of DC VELOCITY magazine. Please include you name and the name of the company or organization your work for.