Industrial real estate is a hot topic right now, but something people often overlook is the material handling systems to outfit their warehouse space. Over the last two years, supply and demand has effected most industries around us, and material handling systems are no exception. Matt Kapfhammer, Business Development Leader at Koppco Material Handling, is here to give his take on how to plan your warehouse space, when to start, and what type of gaps users may not be aware of when entering a new warehouse space as they grow and expand their business.
As Matt explains, the transition between material handling systems planning and the search for industrial real estate is not seamless. Often times, tenants will think of their material handling systems as a line item in their search for space when it should instead be a top priority. The industrial market is tight right now; five years ago, it was much easier to find space, but with fewer options today, you need to act quickly. Planning ahead for your racking needs will put you ahead of the game when four or five tenants fight for each space as it becomes available.
Timing is everything whether you are ordering new racking, buying used, or taking existing systems with you. Ordering new shelving can be costly and time consuming. With the price of steel soaring (up to $135/pallet now versus pre-pandemic costs around $60/pallet) and turnaround times taking anywhere from 12 to 30 weeks, tenants should contact professionals as soon as possible to begin the process. As Matt notes, some tenants will even order racking before their lease is signed or warehouse is built so they can hit the ground running. While there is risk in this, it usually makes the most sense.
The price per SF and building location are obviously key factors in any real estate search, but the end-product should be the goal. When developing a building, how you design the storage space, ceiling height, and column spacing in terms of machine navigation, employee requirements, and safety qualifications will make or break your relocation. Shelving is as important as the infrastructure of the building itself in the industrial real estate world.
Will there be a time when the material handling systems industry normalizes? Matt doesn’t think it will return to pre-pandemic lows anytime soon. Consumer needs drive the industrial market, and the online demand for goods will continue pushing the need for warehouse space and supplies.
Bradford Allen is pleased to share with you our latest office market reports.
Chicago’s downtown office market remained dynamic amid distress in Q1/22 as the flight-to-quality trend continued. With a direct vacancy rate above 18%, rising sublet availability, high-profile properties in distress and ample new deliveries, tenants are finding enticing concessions. Digging beneath the headline statistics, we note:
- The direct vacant and available rate was slightly lower (14.9%) than last quarter (15.2%).
- Net absorption turned negative after a positive Q4/21, but demand is robust for Class A space in red-hot submarkets
- Sublet availability is skewed toward Class B buildings.
- Class B buildings comprise the majority of properties with troubled loans.
CHICAGO, IL — Jeffrey A. Bernstein and Laurence B. Elbaum are pleased to announce that Managing Director Jonathan Seeley successfully assisted American Blues Theater with the purchase of their new location at 5627 N. Lincoln Avenue after vacating their former home at 4809 N. Ravenswood Avenue. Previous ownership was represented in the transaction by Mark Kishtow and Mark Jones of Jameson Commercial Real Estate.
Built in 1985, the 10,844-square-foot property sits on an 18,000-square-foot lot in a densely populated section of Chicago’s Near Northwest neighborhood. The all-masonry construction features a single-story open floorplan with 12-foot clear height, essential for accommodating the theater’s performances. Additionally, the property offers an attractive 168 feet of frontage along Lincoln Avenue, a main traffic artery serving the Lincoln Square and Andersonville neighborhoods.
“After performing a full search of the market to determine alternate options, it was clear that 5627 N. Lincoln was the best fit for the unique use case of American Blues Theater. We pursued the purchase of the building with earnest and closed within 90 days of going under contract,” said Seeley.
Winner of American Theatre Wing’s prestigious National Theatre Company Award, American Blues Theater is a premier arts organization exploring the American identity through the plays it produces and communities it serves. American Blues Theater follows three guiding values both on and off its stages–to be accessible, responsible, and true. Chicago’s second-oldest AEA Ensemble theater, the American Blues Theater and its artists have received 221 Joseph Jefferson Awards and nominations that celebrate excellence in Chicago theater and 40 Black Theater Alliance Awards.
About Bradford Allen
Bradford Allen is a national commercial real estate firm based in the heart of downtown Chicago. The company offers a full array of brokerage services and expertise to entrepreneurial, corporate, and not-for-profit clients. Services include strategy, marketing, and transaction execution for occupiers, investors, and owners of commercial real estate. Bradford Allen is the brand name of Bradford Allen Realty Services.
Today we are joined by Michelle Jones, Director of Interiors at Shive-Hattery. With over 20 years’ design experience, Michelle has always been driven by creating something new and bringing it to life — the office is an art form. With so many facets, there is always something to be learned throughout each project while staying on top of trends.
But in today’s ever-changing world, the biggest question seems to be, “how do we do the next project better?” Bringing an architect in from the beginning of your project is the best place to start. In order to create a true collaboration among office tenant and architect, timing is key. Even while touring space, Michelle suggests bringing your architect along to provide critical feedback and visionary tools to provide crucial elements in a thoughtful vision for your workplace.
It’s clear that the office is here to stay, so how do you build a space when you don’t know what the next five years will look like? Are there best practices for tenants to follow?
Michelle’s advice: start with asking how you’re going to use your space.
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NEW YORK, NY — Glenn Isaacson, President at Bradford Allen’s New York office, is pleased to announce the firm has assisted Avenir Growth Capital in a headquarters relocation to 817 Broadway in Greenwich Village. Isaacson was assisted in representing the tenant by associate Anthony Builder, while landlords Tactonic Partners, Nuveen Real Estate, and Squire Investments were represented by David Faulk, Jason Greenstein, Daniel Levine, and Jordyn Comras of Newmark.
Avenir will relocate from their seventh-floor space at 135 Fifth Avenue to the twelfth floor of 817 Broadway in a new five-year lease. The New York-based equity firm was founded in 2017 to focus on building a portfolio of high-growth, category-defining companies. The firm currently has over $2 billion in assets under management.