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The Evolution of Industrial Space in a Digital World

As e-commerce has continued to grow in popularity over the past decade, supply chains have had to adapt to accommodate not only increased demand in both the volume and variety of delivered goods but also rising expectations in shipping and delivery times.

This led initially to the “Big Box” warehousing and distribution centres that line the periphery of the City and are now leading into ‘last mile’ infill distribution properties. Buildings have gotten taller and more sophisticated with their various integrated technologies, including automation, racking, and robotics systems.

This evolution of function and form have been accelerated due to the pandemic, economic shutdowns, and social distancing protocols. Our behaviours as consumers have changed permanently; the convenience, as well as cost and time savings, are too great to give up. And with them, the needs of Industrial Users have shifted to a new paradigm.

So how will these needs manifest in Industrial space design?

Well, this week I asked a good friend and expert in commercial architecture and design – Frank Di Roma, Principal of Ware Malcomb, to weigh in… this is what he had to say:

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Over the last few years, the design of industrial facilities has changed to meet the demand for increased e-commerce and rapid deliveries.

Most commonly in new developments of warehouses and distribution centers, design changes have occurred due to the need for more space for employees and for quicker delivery turnaround.

Across the industrial market, we are seeing a shift in facility design sizing, spacing, and requirements.

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70’ staging bay with 40’ clear height

Truck Court Depth

The depth of the average truck court has increased to 135 ft. from the previous standard of 130 ft. More space means more trucks can come in and out of the warehouse, and more products can be moved at a faster rate.

Building Heights

Average building heights are slowly increasing. First, from 36 to 38 ft., and now many distribution centers and warehouses are opting for their buildings to be as tall as 40 ft. This is due to more centers using racking and end-users’ increased desire for multistory facilities.

Staging Bays

Staging bays have increased from 60 to 70 ft. as the standard to adapt to the increase in light assembly and packaging being completed on-site.

Parking

With more goods going through distribution centers and warehouse inventory increasing, more people are needed to meet the demands and more trucks are needed to complete the deliveries. That means parking must increase, and designers must provide solutions to accommodate this need, even when space is limited.

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40,000 SF of office area, separation of car and truck traffic

Multistory Design

One solution for the increased parking demand is to create a multistory design, which is becoming more common as warehouses and distribution centers are being built in bigger cities with less space. With more design options to deliver multistory facilities, end users can build in more urban and suburban areas and cut down on delivery times.

Building Materials

With the increase in demand for these multistory buildings, and as the facility heights get taller to account for the new designs, architects and contractors look to new materials to get the job done faster. For instance, rather than pre-cast concrete that is seen often in industrial warehouse and distribution design, alternative building solutions such as insulated metal panels can be utilized because they are procured and built faster.

Companies across all industries are altering their facility designs to meet the new market demands. Major companies like Good Foods, FedEx and DSV Global Transport and Logistics are adapting their facilities so they can handle more traffic.

As shorter e-commerce delivery windows become even more commonplace, and companies adjust to post COVID-19 practices, these new building design trends will continue to define the Canadian industrial market.

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135’ truck court with continuous, uninterrupted flow around the building


Cushman & Wakefield would like to thank their friends at Ware Malcomb for providing this insight to our readers.

For more information on how Ware Malcomb can help you design or plan a commercial project across a variety of uses and asset classes, please visit www.waremalcomb.com or contact:

Frank Di Roma, OAA, MRAIC

Principal, Ware Malcomb

fdiroma@waremalcomb.com

Frank Di Roma is responsible for leading the firm’s continued growth in Canada and oversees the management of the Toronto and Vaughan offices. Since 2000, Frank has had experience in all facets of architecture and has worked on a wide variety of architectural projects including industrial, warehouse, distribution, manufacturing, office, automotive, and retail facilities.

Ware Malcomb is a contemporary and expanding full-service design firm. We provide professional architecture, planning, interior design, civil engineering, branding, and building measurement services to corporate, commercial/residential developer, and public/institutional clients throughout the world.


CONCLUSION

We are all trying our best to stay afloat, and for many of us, our business means everything.

That being said, Owners of Commercial Real Estate in the Greater Toronto Area may or may not be well-positioned to push through the pandemic and its resulting shutdowns. Few, if any, of us could have predicted what happened, and it caught many of us by surprise.

The silver lining here is that the GTA is such a robust and in-demand market with a large ecosystem of Buyers and Sellers. And with our vacancy rates, rental rates, and valuations having hit all-time highs right before COVID-19 took place, there may be plenty of opportunities to find creative solutions; whether it be through rightsizing, refinancing, bridge financing, sale-leasebacks, or otherwise.

While there may exist challenges in execution, Buyers are ever more hungry for product. Local, high-net-worth developers and investors are often active in bottom-of-market conditions. And well-capitalized institutional investors and pension funds are still willing to take a look at a deal if the numbers make sense.

Finally, partial-leasebacks and right-sizing options also exist for those looking to reduce their footprint while raising some capital at the same time.

If you require guidance regarding your commercial real estate property or portfolio, please contact us.

Until next time…


Goran Brelih and his team have been servicing Investors and Occupiers of Industrial properties in Toronto Central and Toronto North markets for the past 25 years.

Goran Brelih is a Senior Vice President for Cushman & Wakefield ULC in the Greater Toronto Area.

Over the past 27 years, he has been involved in the lease or sale of approximately 25.7 million square feet of industrial space, valued in excess of $1.6 billion dollars while averaging between 40 and 50 transactions per year and achieving the highest level of sales, from the President’s Round Table to Top Ten in GTA and the National Top Ten.

Goran is currently serving as Immediate Past President of the SIOR ‐ Society of Industrial and Office Realtors, Central Canadian Chapter, and on the Board of Directors of Muki Baum Accessibility Centre, a Toronto‐based NGO which provides support to children and adults with complex disabilities.

Specialties:

Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development


About Cushman & Wakefield ULC.

Cushman & Wakefield is a leading global real estate services firm that delivers exceptional value by putting ideas into action for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 48,000 employees in approximately 400 offices and 70 countries.

In 2017, the firm had revenue of $6.9 billion across core services of property, facilities and project management, leasing, capital markets, advisory, and other services. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

For more information on GTA Industrial Real Estate Market or to discuss how they can assist you with your real estate needs please contact Goran at 416-756-5456, email at goran.brelih@cushwake.com, or visit www.goranbrelih.com.


Photo credit: DSV

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