Development Magazine Winter 2012

Development - Ownership

Under Development - Want to Attract E-Commerce DC Tenants? Have Plenty of Land

One reason users of e-commerce distribution centers (DCs) need cheap land is that they use so much more of it than the traditional DC. At a session on e-commerce development at the NAIOP Development ‘12 conference, Robert Fenza, executive vice president and chief operating officer, Liberty Property Trust, described a recent one-million-square-foot, e-commerce DC project that required 1,500 parking spaces to accommodate the year-round and surge labor forces.

“The project required an extra 40 or 50 acres of land just for parking the cars, in addition to the stormwater infrastructure required in Pennsylvania,” he explained. “No water can leave the site — it has to be cleaned and then actively irrigated. It is surprising how much of a site is occupied by an e-commerce tenant, but without the available land, the deal doesn’t happen,” noted Fenza.

To fill those 1,500 parking spaces, the client required availability of labor in the range of $10 to $15 per hour. The client was not only looking for blue-collar workers to pick and pack, but also individuals with technical backgrounds, perhaps trained as welders or machinists, which Fenza referred to as “gray-collar” employees.

Robert Fenza

Robert Fenza

“Value-add operations are going on at our e-commerce buildings, where products (such as the Verizon FIOS cable box) are getting programmed, by workers making about $70,000 a year, and shipped on a UPS truck. There are several hundred employees at rows of tables in one of our facilities,” said Fenza.

In addition to abundant labor and land, Fenza commented that reliable fiber optics, cable and electric power must be available on the e-commerce site. “One source is not adequate in an e-commerce facility, and the user will ask about available sources in the RFP. For example, two electric substations are needed as one is not enough. With two substations, if the power goes out, it can be restored in a couple of hours. If there is only one substation, power could be down all day, so back-up generators are needed,” noted Fenza.

 

For more information

IMS Global
Liberty Property Trust

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