E-Commerce and the Rise of the “Big Bomber” Distribution Center: Part 3

October 5, 2017
Strategy & Solutions


E-Commerce and the Rise of the “Big Bomber” Distribution Center: Part 3

By Ward Richmond

THE TOP 4 Design Elements to Consider When Building a Big Bomber

Not too long ago, a 1 Mil SF facility was nothing but an industrial real estate developer’s pipe dream. Today, things have changed, and the explosive rise of e-commerce has made this fantasy a reality. The need for manufacturers and distributors to increase delivery speed is creating an urgent and growing need for these massive facilities.

Here are the Top 4 design elements that are carefully considered by developers when planning a 1 million+ SF facility:

  • Clear Height – Cubic footage can make or break a deal and determining clear height is one of the most important design features in these Big Bombers. Clear height is a measurement of the floor to the roof joist. The higher the clear height, the larger the cubic footage footprint – which is what the end user is typically analyzing. Some tenants are racking as high as possible to take advantage of the clear height and max out cubic footage while others – like Amazon – are building multiple mezzanines. I remember when 32’ clear sounded crazy. Today, in DFW, 36’ clear is commonplace on a 1 Mil SF + spec building and developers are now moving up to 40’. Higher clear heights differentiate buildings but also cost more money to build. Buildings this high can also require thicker slabs and enhanced fire protection requirements. Developers will continue to analyze the risk involved with the premium cost that comes with clear excess height versus the competitive advantage that it undoubtedly provides by appealing to a larger pool of potential tenants.
  • Building Depth – A lot of single tenants (1 Mil SF+) prefer 600’+ deep buildings, but if the developer wants the option to demise the building for two different 500K SF users, they might consider 570′ depth which is typically preferred by the 500K SF user versus 600’ or 620’.
  • Column Spacing– Column Spacing is the distance between the columns in these warehouses. The staging bay is the distance the columns are located from the loading docks. The general rule of thumb is that the greater the distance between columns and the more depth on a staging bay, the better. Deciding on column spacing for a spec building is like throwing darts. Everyone seems to have a different method to the madness. Some developers visit with material handling specialists, others visit with the end users, others just copy what Amazon is doing. Go figure. 54’ x 50’ with 60’ staging bays is what real estate developer, Port Logistics Realty did on the most recent 1 Mil SF project in town. I’ve been told that when you start moving past 54’ x 50’ mark, you will see increased costs to beef up the steel in these columns and the cost will begin to outweigh the benefits. Like everything else, I expect to see this size continue to grow as end users demand more efficient space. I’ve heard that we will see 70’ staging bays on new spec buildings that land in the next 12 months.
  • Parking – Parking is like clear height and column spacing: the more, the better. That being said, the cost of concrete is at an all-time high, and too much parking can have a negative impact on economics. On recent spec buildings, we have seen 185’ truck courts to accommodate trailer parking on both sides of the building, but I’ve also heard that other developers are considering jumping to 210’ truck courts to accommodate the heavy trailer and car parking requirements demanded by e-commerce companies.

Keeping these four design factors top of mind will is crucial when designing a modern bulk warehouse if you want to land the next big deal and successfully lease up a Big Bomber.

Our team at Colliers International works closely with tenants and developers around the globe to develop and execute world-class real estate strategies utilizing our global team of logistics and transportation real estate specialists. Our team provides best in class Site Selection services including Supply Chain Consulting, Labor Analytics, Build-to-Suit Project Management and Economic Incentive Negotiation services.

Rise of the “Big Bomber” Part 1

Rise of the “big bomber” Part 2