Multistory warehouses with up to five floors of logistics space are starting to rise across the United States, five years after Prologis built the country’s first multistory warehouse in south Seattle for Amazon, in part thanks to the continued growth of last-mile logistics projects.
Vertical warehouse construction, which has been popular for at least two decades in Asia and Europe, has gained traction across the United States in recent years, with 10 multistory buildings finished or under construction in greater New York City alone, according to a JLL report called “Multistory Warehouses and Their Towering Future.”
Prologis built the U.S.' first multistory industrial project, called Georgetown Crossroads, at 6050 E. Marginal Way in 2018.
Since then, projects have emerged in other densely populated regions with limited available land for development. The San Francisco Bay Area, Southern California, Washington’s Puget Sound, Chicago, Boston and Philadelphia are all primed for more vertical logistics development, according to the report. Other promising areas for tall warehouses and other urban logistics projects include Atlanta, Miami, Dallas and Houston.
“There is tremendous potential in the future of multistory and urban logistics in both the established urban logistics markets and emerging logistics markets,” according to the report's author, JLL Vice Chairman Leslie Lanne.
Finding suitable places to build tall warehouses and other last-mile delivery facilities can be difficult due to zoning restrictions, tight land supply and competition from other types of projects, such as hotels, apartments and shopping centers, according to the report.
Developers have responded to some of the challenges with creative solutions, JLL said.
In New York’s Bronx neighborhood, developers Innovo Property Group and Affinius Capital turned a 20-acre site with an antiquated movie theater into a multistory industrial development called 2505 Bruckner.
Chicago's first multistory logistics project, the 1.2 million-square-foot 1237 W. Division, expected to open next year, is planned to include both rooftop parking and a five-story garage, according to JLL.