Clicks and Bricks The E-commerce Evolution's Impact on CRE John Morris, Cushman & Wakefield Kim Snyder, Prologis Jonathan Tratt, Tratt Properties Todd Watson, DCT Industrial Trust
John Morris Cushman & Wakefield Logistics and industrial services lead, Americas for Cushman & Wakefield A recognized industry expert in network and location strategy for industrial operations, and has worked with numerous Fortune 500 companies. Brings an extensive background in supply chain strategy, network design, cost reduction and transportation operations critical components in corporate site selection.
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Clicks and Bricks The E-commerce Evolution's Impact on CRE John Morris, Cushman & Wakefield Kim Snyder, Prologis Jonathan Tratt, Tratt Properties Todd Watson, DCT Industrial Trust
Kim Snyder Prologis Southwest regional president of Prologis and responsible for all regional activities including development, acquisitions and operations. Key markets included in this region are Southern California, Las Vegas and Phoenix. More than 31 years of experience in real estate, development and construction, acquisitions and dispositions, leasing and finance. A former president of the NAIOP-Inland Empire Chapter.
Jonathan Tratt Tratt Properties Principal for Tratt Properties, LLC, a development and investment company based in Phoenix, Arizona. He has been a member of NAIOP since 2001 and is a member of the Board of Directors, a NAIOP-PAC Trustee and a member of the Industrial Development II Forum. He is the 2017 NAIOP Chairman.
Todd Watson DCT Industrial Trust As senior vice president for DCT, Todd Watson brings over 18 years of real estate experience and is responsible for overseeing development, operations and capital deployment activities in the Florida markets, where the company owns and operates approximately 4 million square feet. Currently Watson and his Florida team are in development and design on over 840,000 square feet of product from Orlando down to Miami.
15.0 16.6 17.9 19.1 25.1 17.2 MSF Q1: Is ECOM really ALL of the industrial CRE business right now? How is this trending? E-Commerce Leasing Activity in Top Markets 28.0 24.0 20.0 102.3 MSF Total E- Commerce deals signed since 2011 (200,000+ SF) 16.0 12.0 8.0 4.0 0.0 2011 2012 2013 2014 2015 2Q16 Total SF Retail/E-tail deals 200K+ Top US markets are Chicago, Los Angeles, Inland Empire, New Jersey Metro, Atlanta, Houston, Dallas/Fort Worth, Miami, PA I-81/I-78 & Philadelphia E-Commerce has accounted for 24% of activity since the start of 2014 E-Commerce and E-Tail related firms leased 19 msf of deals so far in 2016, up 31% from the prior year
Q2: How are these buildings UNIQUE? How TALL? What is the impact on CRE Capital deployment/project decision processes?: Amazon, Nordstrom Picture here (coming) of Nordstrom Ecom Building (inside)
36 v 32, 1.2MSF 4,000 more pallets.
Q3: What is the impact with the Clicks & Bricks evolution on CRE Org Design and Process? Longer? Different?? CFO CPO CAO CSCO CRE Lead CRE Lead CRE Lead CRE Lead CRE Fxn CRE Fxn CRE Fxn CRE Fxn
Q4: Who are the Winners and Who are the Losers? 2016 Major Chain Store Closures 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2010 2011 2012 2013 2014 2015 Midyear 2016
Q4: Who are the Winners and Losers? Retail, sure, but what about others? Retailers in Retreat: Recent Closures and/or Announcements 500 450 400 350 300 250 200 150 100 50 0 Closures/Announcements Select Retailers, 100 units 100 90 80 70 60 50 40 30 20 10 0 Closures/Announcements Select Retailers, 100 units Source: Company data, Cushman & Wakefield Research
Q5: What is the impact of the Clicks & Bricks evolution on 3PL Delivery Models?: 3PL Huge Growth 3PL % of U.S. Logistics Spend 12 10 8 6.8 7.8 8.1 8.7 8.7 8.8 8.6 9.4 9.9 10.6 10.9 10.9 11.1 11.3 11.3 6 4 2 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*
Q5: What is the impact of Clicks & Bricks on 3PL Delivery Models?: Investment Capital, Consolidation
Q6: What is the Clicks & Bricks impact on asset values? Terms/Factors STD DC ECOM DC Lease Term (+) Facility Uniqueness/Variability (-) Automation/Specialization (+) Location Labor/Cost Effectiveness (+) Complicated Deal Terms (-) OVERALL???
Q&A
Give Us Your Feedback for this Session! Session evaluations are available on your chair. Please take a moment at the end of this session to provide your feedback on the content and speakers. Evaluations can be handed in to a NAIOP staff member at the back of the room. Thank you!