E-commerce Growth to Bring About Construction of Multi-Story Warehouses

With e-commerce firms having a harder time finding space for warehouses in crowded and expensive cities, multi-story warehouses are expected to become the norm, says digital marketing executive Augusto Beato.

"The growth of e-commerce has altered the landscape of industrial markets in large metro areas as e-commerce tenants absorb large blocks of space close to population centers for distribution facilities and last-mile delivery," notes Beato, who is the CEO of Portland SEO.

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In New York, where the average asking rent per square foot has climbed from $9 in 2012 to nearly $14 today, many developers are beginning to consider building warehouses vertically.

E-commerce is more warehouse-intensive than traditional retail, which has had an upward effect on rent in areas where there are large concentrations of people and space is at a premium. In addition to being closer into the population, e-commerce facilities also require more space for truck and trailer parking than other types of industrial facilities.

Furthermore, intelligent industrial buildings, such as the Amazon Robotics headquarters at 300 Riverpark Drive in Boston, require a highly trained workforce and can often take up large amounts of space close to city centers.

Amazon, for example, had an army of 45,000 robots as of 2016 that selected and packed orders in its fulfillment centers, and as of this spring, that number had grown to more than 100,000. Its fulfillment centers are huge -- many of them well in excess of 1 million square feet

“Don't be surprised if, in the next five years, you’re going to see a 20-story warehouse,” Beato added. “Amazon is going to be able to build a 20-story warehouse because it can vertically do all of the processes automatically."