With the rise of e-commerce fueling a surge in industrial real estate demand, savvy developers are learning it takes more than picnic tables to keep tenants happy, especially in cases where the workforce is on property around the clock. This growing realization is giving way to a new type of asset where industrial space is being enhanced by retail amenities.
Much the same way Miami has gained prominence from a residential, cultural and tourism standpoint, the city has become a hotbed for industrial investment activity over the past decade, thanks in large part to its status as one of the country’s leading import and export regions.
The region’s industrial real estate sector — now considered a top-tier U.S. market — is experiencing an increased investment in building new innovative warehousing facilities and renovating and expanding existing properties to better suit the evolving industrial needs of today’s users from blue-chip corporations to family-operated businesses.
The warehouses of today are very different than those from 10 to 15 years ago. The investment on creating a high-tech, high-touch design focused on the experience the users will have inside the spaces is of utmost importance. From the ample natural light to the glass storefronts, the skylights throughout the warehouses and enhanced finishes, the industrial spaces of today feel modern, sophisticated and create an environment for the workers that influences their mood and enhances their productivity.
While entertainment options and warehouses don’t typically coexist, one of the world’s largest developers, Prologis, has led the charge in South Florida testing out a new mixed-use model that wed lifestyle retail with state-of-the-art industrial space at its 500-acre Beacon Lakes complex in Doral. (Note: JLL, of which I am managing director, handles the industrial leasing for Beacon Lakes.)
This mixed-use concept first rose in South Florida after Beacon Lakes decided to give up potential warehouse space to add restaurants, shops, a fitness center and an entertainment complex designed for the park’s built-in workforce of more than 5,000 people. Already home to high-profile industrial users like Amazon and NBCUniversal’s Telemundo, the retail-driven phase offers a value-add to existing companies and prospective tenants.
In addition to the 4.75 million square feet of industrial space filled with tenants including NBCUniversal Telemundo’s global headquarters, Amazon, Aerospace Asset Trading, Ryder System, Inc., Dufry America and UPS, there is also 495,000 square feet of shopping, dining and entertainment within The Shoppes at Beacon Lakes including The Home Depot, Michaels, Dick’s Sporting Goods, Topgolf, and 24 Hour Fitness to name a few. For example, Topgolf regularly hosts events for the park’s tenants and offers special discounts to nearby neighbors.
By successfully blending Class A Industrial space with amenities such as shopping, dining and entertainment, the workforce inside the park can have convenient and fast access to grab lunch without having to jump in the car and drive five miles, meet friends or family for dinner after work, or arrange a company happy hour just steps away from the office.
The result of this marriage of industrial and retail has been a very symbiotic relationship between the two components, Prologis Beacon Lakes and the Shoppes at Beacon Lakes, with both boasting close to 100% occupancy rate and excellent leasing performance.
Tenants want to be there because of what the park offers their employees at all levels of the organization, from those handling the packaging and product assortment inside the warehouses to those creating the marketing collateral and budget spreadsheets in the office side of the business.
Beacon Lakes represents the most human-centric industrial design for a planned development executed to date in South Florida. It proves that amenities often matter and are worth more to companies because of the positive impact they have on their efforts to recruit and retain talent.
With Miami continuing to attract the industrial real estate industry’s leading developers, property owners and tenants, there is no doubt we will continue to see investment in innovative design and master planning of industrial warehouses and business parks that will offer a competitive advantage to the region over the years to come.
Brian Smith is managing director at JLL, a global professional services firm specializing in real estate and investment management, leading its industrial brokerage division in South Florida. He has completed hundreds of industrial transactions valued at more than $2 billion. His team oversees a portfolio of 10 million square feet of industrial space in Miami Dade, handling leasing, property and project management.