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How E-Commerce and One-Day Shipping are Driving Our Industrial Portfolio
Main Image: Track 6, Seattle, WA (image courtesy of Nelson Architects)
Throughout the history of AHBL, we have completed projects of almost every kind. As the market fluctuates, we often find ourselves changing with it and specializing in more and more project types. Over the years, our industrial work portfolio has typified this response to an ever-changing economy.
Before COVID-19, the global economy was trending heavily toward e-commerce. Industry giants, like Amazon, were working to change the way we buy and receive goods. Accordingly, our industrial work in recent years has been heavily focused on meeting the demand for distribution facilities. AHBL has made fantastic inroads in developing relationships with industrial developers and builders; in particular, our structural team has been extremely busy in the design of distribution centers across Western Washington.
In the past, distribution centers tended to follow a certain blueprint – relatively small (200,000 sf and less) and geared toward warehousing goods for local brick and mortar retail centers, with a clear space of approximately 24 feet. Today, new facilities tend to be much larger (400,000 sf to 1,000,000 sf) and taller (from 36 feet to upwards of 40 feet of clear space) to accommodate greater volume and automation. Goods are often stored for online sales and home delivery. This raises the bar for structural systems to accommodate the larger-sized facilities with greater height requirements and keeps our team extremely busy.
Another notable change in the development of these types of facilities is the way parcels are built out. Developers have historically acquired property and developed one building at a time. Today, many are building out entire warehouse complexes simultaneously to capitalize on the wave of investment and the demand for space. With vacancy rates at a historic low, these projects are almost always done on spec with tenants lining up to commit to leasing the space prior to construction completion.
The vast majority of our recent work in industrial distribution centers has been focused in the suburbs surrounding Seattle and Tacoma (e.g., Everett, Maltby, Sumner, Fredrickson, Lakewood, and Centralia), due in large part to the availability of property in these areas. However, an interesting trend is now emerging which will also inform AHBL’s future portfolio. Spurred on by Amazon, many merchants are now offering one-day or even same-day shipping to stay competitive. Sometimes dubbed “Last-Mile Delivery,” this service relies on predictive algorithms to identify products in high demand and then stores them in warehouses close to large population centers. Often, land is not readily available in these locations, so these specialized warehouses must build up rather than out. This has resulted in a new trend of multi-story warehouses, one of which AHBL has been providing structural services for in Seattle’s SoDo area.
As our portfolio continues to grow, so too does our value to clients. Most encouraging is our ability to cross-sell these types of projects across our lines of service. Civil and survey have also seen significant work in the industrial sector, and there are growing requests for landscape architecture and planning services. Relationships are at the center of this expanded responsibility and will continue to be a priority as we commit ourselves to excellent client service at every turn.
AHBL has realized success by diversifying our work and never putting all our eggs in one basket. We will continue pursuing and completing traditional industrial and manufacturing projects, just as we always have. However, market reports and economic forecasting indicate that e-commerce and distribution will only continue to grow, especially in light of global pandemic and disruption of traditional commercial avenues. While we cannot begin to know the long-term economic fallout of this virus, AHBL will strive to stay ahead of the market and place ourselves at the forefront of emerging opportunities.