services and allows businesses to manage their cold storage needs and transportation requirements through one 3PL partner. “This development provides growth opportunities not only in our cold storage business but also in our direct-to- consumer ful llment and cross docking warehouse business units,” says Russell Leo, CEO of RLS Logistics. THINK AHEAD
8 are always changing, he says. But the new realities around power, water, and climate represent “the biggest changes in the past ve years.” STRIKE A BALANCE While all real estate search requirements are unique, “site selection is generally a balancing act between real estate, labor, and transportation costs,” says Kristin Leffew, vice president, real estate at Kenco, a 3PL provider based in Chattanooga, Tennessee. In 2008, the eight Great Lakes states signed the Great Lakes-St. Lawrence River Basin Water Resources Compact, which allows them to control the lakes’ water and keep it in the region, with limited exceptions. The states reached a similar agreement with Ontario and Quebec, Canada. Regarding climate, Roth recommends looking at FEMA’s National Risk Index, which includes data on 18 natural disasters—including avalanche, ood, re, and drought—to determine risk by region. “The number of disasters causing more than $1 billion in damages is alarming,” Roth says. “If you’re going to spend $50 million-plus on a plant, those are consistent factors to consider in site selection.” The factors affecting his 1.5 Rule eventually impact industrial real estate about 1.5 years later,” he explains. For manufacturing, the 1.5 Rule means estimating your needs for power, water, climate, and “an additional factor, which is the new COVID,” Roth says. In the coming years, power and water will become scarcer, and climate change will play a bigger role in where natural disasters are likely to be more severe, he notes. He recommends looking to expand in states that are able to export power, which means they have excess power. “Few states do that,” he says. Water is also more dif cult to nd, “but the Great Lakes contain 84% of the continent’s fresh water, 95% of U.S. water, and 21% of global water,” Roth says.
6 And, with their current location, “we are already in a sweet spot to get to New York City, Philadelphia, Washington DC, Indianapolis, Nashville, Atlanta, and the entire East Coast,” Peel notes. “We can offer one-day trucking to more than 50% of the U.S. population without having to move,” he adds. LEVERAGE EXISTING ASSETS 2023, it announced the opening of its expanded New eld, New Jersey, cold storage warehouse. “Our New eld facility is a busy campus,” said John Gaudet, vice president of business development, in a statement. “Adding cold storage warehouse capacity here has been well received by current and new customers. We are well on our way to lling the space and moving new customers into our network. “With increased cold storage inventory, enhanced capabilities in “We decided to invest in the community where we already have three buildings,” says Cameron Peel, president and CEO of Camrett. “We have a good brand and name in this community and are con dent we can ll 58 jobs over the next 15 months. Having roots in southwest Virginia made it an easy decision for us to invest here.” In addition, the company considered its customer base and the position that Camrett holds within their supply chains. “Costs for customers go up if we are located in Timbuktu,” Peel explains. The company did consider other locations in the Southeast, but higher construction costs intervened. “It was hard to justify putting $150 per square foot into the ground when it was $50 per square foot four years ago,” he says. RLS Logistics, a New Jersey- based cold chain 3PL, also decided to increase operations in its existing area. In October ful llment, and LTL cross docking, this expansion is a great opportunity for the East Coast marketplace,” Gaudet added. The on-site expansion gives customers access to RLS’ temperature-controlled freight brokerage and LTL shipping
Adam Roth lives by what he calls “The Rule of 1.5.” The executive vice president of Chicago-based NAI Hiffman, an independent
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real estate services rm, says that transportation drives real estate. “I have found that issues in this sector
“SITE SELECTION USED TO BE ABOUT POWER, UTILITIES, AND INCENTIVES, BUT SINCE THE PANDEMIC, IT’S LABOR, LABOR, LABOR.” TERRY COYNE VICE CHAIRMAN, NEWMARK
January 2024 • Inbound Logistics 147
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