Warehouses Transform N.Y.C. Neighborhoods as E-Commerce Booms @mfgday #MFGDay22
Earlier this year, the New York Times reported on the high demand for warehouse spaces in concentrated urban areas like Brooklyn, Queens, and parts of New Jersey, largely due to the expansion of online relatilers + supporting logistics companies. It’s an interesting real estate trend that stands in contrast to what happened to warehouse spaces in the late 20th century as manufacturing left downtown NYC, and warehouse spaces were acquired by artists and eventually other commercial ventures looking for a hip zip code. The recent boom is an extension of already established online retail giants like Amazon, and the shipping and logistics teams needed for fulfillment. This has caused some concern from locals in neighborhoods like Red Hook in Brooklyn who dread the influx of traffic, as well as from smaller manufacturing businesses who have occupied these spaces for the last decade or so at relatively affordable rents.
Just 1.6 percent of all warehouses in New York City and only 1.3 percent in New Jersey are available for lease, according to the real estate firm JLL; only the Los Angeles area has fewer warehouse vacancies in the United States. Some companies are converting buildings never intended to be warehouses. Amazon turned a shuttered supermarket in Queens into a makeshift package hub.
The soaring demand for warehouses, once the ugly duckling of the real estate industry, underscores their pivotal role in a complex global supply chain. Nationwide, developers are pouring billions of dollars into the construction of new facilities, helping lift the commercial real estate sector, which has been battered by the emptying of offices during the pandemic.
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