Tag: warehouse expansion

Industrial Bulk Distribution Development Momentum Continues, Fueled by E-Commerce

By Kerry Smith, Editor – St. Louis Construction News & Review Magazine

Speculative industrial warehouse and distribution construction remains alive and well across the St. Louis MSA, as evidenced by the 769,000-square-foot “Building 5” in Lakeview Commerce Center that is anticipated to reach completion this summer.

Kadean Construction of Fenton is building Building 5, located in the 750-acre bulk distribution park in Edwardsville and Panattoni Development is the owner-developer. Mike Eveler, Kadean’s president, said the construction project includes 80 loading docks with clearing heights of 36 feet.

“This is the second building we’ve built recently at Lakeview Commerce Center,” Eveler said. “In addition to constructing Building 5, we built its sister building, Building 4, which is 769,000 square feet and is occupied entirely by Amazon.”

Although Building 4 was completed in 2017, according to Eveler, Amazon is already performing technology upgrades to keep pace with the latest advances in fulfillment/distribution technology.

“In 2018 they’ve (Amazon) invested approximately $23 million worth of tenant improvement work (in Building 4) as well as heavy and electrical distribution,” he said. “Much of this investment has been related to robotics within the facility to hold the product and move it around.”

As the dynamics of e-commerce order fulfillment improve nearly as quickly as consumer order-and-delivery expectations do, serving these industrial clients is also a dynamic process, according to the Kadean exec. “About six weeks ago, Amazon contacted us to request additional work specific to fulfillment robotics,” Eveler said. “We’re already tearing out some of what we’ve built (internally) to help them upgrade. “Just their robotics system upgrades represent about $1 million worth of work,” he added.

Kadean Construction works in tandem with Panattoni Development in other industrial parks across the St. Louis MSA such as Aviator Park in Hazelwood – the 165-acre park on the site of the former Ford Motor Co. manufacturing plant at Lindbergh and Interstate 270. Mark Branstetter, partner at Panattoni, said his firm has developed approximately 1.7 million square feet in Aviator and still have equally that much capacity for future development.

“We are about halfway through developing Aviator,” Branstetter said. “It’s interesting…although Lakeview and Aviator are relatively proximate – some 12 miles from each other – their respective user groups are markedly different. Lakeview in Edwardsville attracts the larger, regional distribution centers whereas Aviator in Hazelwood attracts more local infill.”

Although e-commerce is a prominent driver of bulk warehouse and fulfillment development nationally and regionally, Branstetter said e-commerce isn’t the only factor propelling the construction of these types of buildings. “A big topic that gets published is indeed e-commerce,” he said. “It’s certainly a big trend, but it’s not the sum total of what’s driving development in this industry sector. E-commerce is actually a very late trend, just in the last decade or so. Everyone is trying to optimize their supply chain, be it location or size orientation. But once they’ve optimized these locations across the country, companies are then working on optimizing the inner workings of their processes, again with the consumer at the forefront.”

Reprinted with permission from St. Louis Construction News & Review Magazine