Larry Callahan, CEO of Pattillo Industrial Real Estate, a southeastern USA developer of industrial properties, joins The Commercial Real Estate Show host Michael Bull to discuss the growth of the industrial market and a number of trends impacting it. He notes that e-commerce is having by far the most impact on the sector, with the most active segment of the market in buildings with more than a million square feet, generally with a single tenant. He further notes that an emerging trend of major e-commerce providers of smaller closer-to-the-customer regional distribution centers, with sizes more in the 200,000 to 300,000 square feet range versus their sole strategy of 50 to 60 million square feet in years past. He goes on to further speculate that an under the radar trend of smaller businesses growing into a size that needs this 200,000 to 300,000 square foot range is providing additional fueling to needs in this size range. He goes on to discuss the re-purposing of dead strip malls as industrial properties, surely something we will see more of as retailing continues its shift to online. Mr. Callahan notes that whereas in the recent past 65-70% of new construction has been build to suit, nearly 80% of activity is not speculative. Finally, he believes that parking area requirements, both for trucks and employees, are increasing. Interestingly, he believes the lack of adequate parking in existing facilities has driven much of the build to suit activity.
More About Patillio Industrial Real Estate
Pattillo Industrial Real Estate, founded in 1950, is a third generation developer and the largest privately held industrial development company in the Southeastern United States. They specialize in the development, acquisition, and management of industrial properties, building and land. The own and manage Class A industrial buildings located in master planned industrial parks in the states of Georgia, Florida, South Carolina, Tennessee, and Kentucky. Pattillo Industrial Real Estate is actively developing and acquiring strategically located land and buildings throughout the Southeast United States. Although they appear not to own properties in the Miami area, Mr. Callahan’s comments apply to all markets, Miami included.