U.S. Warehouse Demand Grows as Industries See Long-Term Trends in COVID-19 Response

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Researched by Industrial Info Resources (Sugar Land, Texas)--No one knows how much longer COVID-19 will remain a public threat, but U.S. businesses are beginning to treat recent changes in consumer behavior as long-term trends that demand long-term adjustments, even if the pandemic were soon to subside. Retailers, equipment suppliers and other companies that invest heavily in warehouse and distribution facilities are accelerating these developments, given the rising demand for e-commerce and home-delivery services, as well as businesses that are seeking to minimize human contact. Industrial Info is tracking more than $20 billion in U.S. warehouse and distribution projects set to kick off through December, including $326 million worth that had faced delays earlier in the year due to the COVID-19 pandemic.

Click on the image at right for a graph detailing U.S. warehouse and distribution projects set to begin construction by the end of the year, by state.

Stay-at-home and shelter-in-place orders have spurred a sharp, enduring increase in online shopping for groceries and other essential products. According to a recent report from real-estate firm CBRE Group Incorporated (Los Angeles, California), demand for warehouse space has rebounded dramatically across the U.S., particularly near high-density population centers, after a dip in the month following the initial lockdowns. Companies already were accommodating a growing trend toward online consumer services across multiple industries before COVID-19 reared its ugly head, and many are assuming their customers and clients will continue to seek these services after the pandemic subsides.

Demand is strongest for warehouses of at least 100,000 square feet, according to CBRE, and food producers account for much of the spending attributed to revived storage and distribution projects, according to Industrial Info's project database. Wegmans Food Markets Incorporated (Gates, New York), which caters to the Mid-Atlantic and Northeastern regions, is preparing to begin construction next month on an estimated $175 million grocery distribution center in Ashland, Virginia, after facing some uncertainty during the initial phase of the lockdowns. The 1 million-square-foot facility, less than 20 miles north of Richmond, will include dry storage, refrigerated and frozen food capacity. For more information, see Industrial Info's project report.

Fifth Generation Incorporated (Austin, Texas), the parent company of Tito's Handmade Vodka and the only active vodka distiller in Texas, is preparing a series of warehouse additions at its distillery in Austin that were pushed back to August from May:

• a $12.5 million, 200,000-square-foot facility; see project report
• four warehouses, each 20,000 square feet, totaling $10 million; see project report
• two warehouses, each 15,000 square feet, totaling $2.5 million; see project report

Among the projects yet to have their schedules affected by COVID-19 precautions are new and expanded logistical facilities for Amazon.com Incorporated (NASDAQ:AMZN) (Seattle, Washington). The online giant is seeking permits for an estimated $105 million fulfillment center in Forney, Texas, totaling more than 1 million square feet, and is preparing to convert one of its existing warehouses into an estimated $85 million fulfillment center in Etna, Ohio. Given that both projects remain in their planning phases, the kickoff dates are highly tentative. For more information, see Industrial Info's reports on the Texas and Ohio projects.

Amazon also is planning to convert another warehouse into an estimated $85 million fulfillment center in Etna, Ohio, with more than 1.2 million square feet. The Etna facility has become a major supplier of COVID-19 supplies, such as masks and hand sanitizers, to Amazon facilities around the world. For more information, see Industrial Info's project report.

Engineering work recently began on Amazon's $80 million in renovations at a distribution hub in Cromwell, Connecticut. For more information, see Industrial Info's project report.

For obvious reasons, medical device distribution has received renewed attention in recent months. Medline Industries Incorporated (Northfield, Illinois), the largest privately held U.S. manufacturer and distributor of medical supplies, already was preparing to build an estimated $70 million distribution center for medical devices in Richmond Hill, Georgia, before the outbreak and has picked up several key approvals since. For more information, see Industrial Info's project report.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at https://www.industrialinfo.com.