We seldom think about the many
people, processes and properties
that make up the supply chain that delivers goods and services that are
so important to our everyday lives. Often
described as the least glamorous sector of
commercial real estate, the industrial sector is the one that perhaps has the most
direct impact on all of us.
“As we continue to move to a more interdependent and competitive global economy, the industrial sector continues to
adapt,” says John Jenkins, senior vice
president and industrial specialist with CB
Richard Ellis in Tampa. “Change occurs at
many levels, but, in most every instance, it
is driven to seek ever-improving, bottom-line efficiencies. It may not always be pretty, but the effectiveness of the supply
chain can have a significant effect on our
professional and personal lives.”
Smart Business asked Jenkins about the
state of today’s industrial sector and how it
will continue to change to meet our needs.
How do global factors affect today’s logistic
decisions?
There is no question that the world continues to become a more interdependent
marketplace. As a result, every phase of
production, warehousing and distribution
is continually being assessed. New economies are evolving, established ones are
seeking better ways to compete and all
are looking to better serve a broader base
of markets. In that ever-changing process,
the logistical equation is continually morphing. Positioning today to capture
opportunity tomorrow is critical. Decisions at every point in the process must
consider much broader implications:
Where and how raw materials are
shipped, who leads in technology and
production, how finished goods are
imported and exported, how we get to the
consumer and always with price key from
manufacturer to consumer.
So how do all those factors affect our local
market?
Again, we go back to a system built on
interdependency. The importance of connectivity to air service, working ports, rail
and interstate networks are increasingly
important in the local market. The proximity and quality of each of these independent, yet often interconnected, pieces
is key to how effective and efficient the
Tampa market can operate. Therefore, we
must make smart, local decisions today
that best serve our growing population yet
position us beyond our state boarders.
This is particularly important as a number
of geographical areas compete vigorously
for not only local but regional and national business. We must think globally while
executing strategically in our local market. It is a very complex process that, in
the end, delivers the most basic needs to
sustain our way of life.
How have industrial properties changed in
this equation?
The most notable physical change in
new properties has been an increase in
clear heights. With interior ceilings that
now can exceed 30 feet, the ability to rack
and subsequently store more material on
a smaller floor area certainly allows for greater efficiency and helps offset the cost
of occupying a new building. As in all new
construction, greater care in design and
construction is given to meet increasingly
stringent regulatory codes to protect
against inclement weather. Improved life
safety systems better protect workers and
more efficient lighting, roofing and even
paint can improve operating efficiencies.
On the exterior, design of improved truck
courts can greatly enhance operations,
especially with larger trucks moving
greater amounts of materials.
For existing facilities, many owners/
users are making modifications at their
current site to avoid any disruption in
operations or work force that a potential
move may generate. In some cases, specific requirements are being answered by
clients choosing to have a new facility
built for their defined needs. In almost all
cases, the decisions are, in part, driven by
the desire for greater efficiencies.
What effect is the current economy having
on the industrial sector?
I think it’s clear, and it goes back to my
initial comments, that we are connected
beyond our own borders. As such, the
effects of the challenges experienced in
the global capital markets has had an
effect at almost every level. The industrial sector has certainly seen a slowdown
in current activity as business and personal decision are tempered with caution, therefore affecting demand up and
down the supply chain. Certainly, the
drastic changes in residential construction have had an effect on those industries that supplied a variety of products
and services.
Remember, however, that as our population continues to grow, be it globally or
nationally, the need to move even greater
amounts of goods and services will
always be met by the ‘Ugly Betty’ of the
commercial real estate sector.
JOHN JENKINS is an industrial specialist and senior vice president with CB Richard Ellis in Tampa. Reach him at (813) 273-8438 or
[email protected].
