Developers are scouring North Jersey and surrounding areas to find sites appropriate for building new warehouses to meet demand driven by burgeoning e-commerce, record growth of goods moving through the port, an economy rebounding from the pandemic and other factors. The expansion of warehousing and public sector efforts to address potential impacts on communities was the subject of a meeting of the Metropolitan Area Planning (MAP) Forum's Multi-State Freight Working Group on September 14. Visit the working group's webpage
to view a recording of the workshop.
“The entire MAP Forum region has seen a profound growth in industrial development in recent years,” said Middlesex County Commissioner Charles Kenny, Chair of the NJTPA Freight Initiatives Committee, who welcomed participants. The MAP Forum is composed of representatives from 10 Metropolitan Planning Organizations in New York, New Jersey, Pennsylvania and Connecticut. Kenny noted that in North Jersey alone, 50 million square feet of industrial space has been added in the last four years, bringing the total to 862 million square feet.
“There is just a tremendous appetite for [warehouse] space that is hard to keep up with,” said Brian Banaszynski, who leads northeast industrial development at Transwestern Development Company. He said five years of expected growth in e-commerce was compressed into 18 months during the pandemic, greatly accelerating demand for warehouse space.
The growth in demand has driven rents to record levels in North Jersey, topping $10 per square foot in many locations and as high as $20 per square foot in a prime location with access to the Lincoln Tunnel. Yet the rising rents, he said, “haven’t put a dent in vacancy rates,” which remain very low at 3 percent, compared to 9 percent in 2012.
He said the need for space, along with the greater regulatory hurdles to development in New Jersey, are pushing developers to pursue sites in surrounding areas, including Pennsylvania’s Lehigh Valley, South Jersey, Staten Island and Delaware. A constraint on this shift in development is that companies choose locations with ready access to a pool of labor, which is increasingly scarce.
Dan Disario of Langan Engineering and Environmental Services said most of the facilities being built are “modern high cube” warehouses, with high ceilings that can accommodate tall racking systems for storing goods.
However, traffic to and from the facilities varies according to their function. He gave the example of two adjacent facilities in Middlesex County: a 928,000-square-foot facility serving Volkswagen-Audi was the destination for 250 cars and 90 trucks over a 24-hour period; next door, a 774,000-square-foot facility serving Home Depot saw 200 cars and 185 trucks over the same period.
Amazon, which accounts for most new facilities in the region, seeks to control all aspects of the supply chain, from purchase to delivery, Disario said. This means the company leases and manages separate facilities for receiving goods, fulfillment (both for small sortable goods and larger non-sortable goods) and delivery stations for dispatching delivery vans. Many companies, he said, will be seeking to replicate Amazon’s comprehensive model, which will “generate sustained growth in warehousing” in coming years.
Echoing other speakers, Becky Bradley, Executive Director of the Lehigh Valley Planning Commission (LVPC), said her region is experiencing extraordinary demand for warehouse development, with proposals for 1 million square feet or more per month. She said this partly reflects the less stringent development requirements in Pennsylvania compared to New Jersey and other states.
Overall, she said the region was “going through the Wild West of industrial growth.” This has prompted LVPC to prepare a Community Guide on High Cube and Automated Warehouses
. It includes a model ordinance for local government and other guidance. She noted that automation in the newest warehouses allows greater height and reduces the building footprint, which can help limit land use impacts.
Other freight planning tools were highlighted at the meeting. Mike Ruane, Manager of Freight and Aviation Planning at the Delaware Valley Regional Planning Commission, presented on the Philly Freight Finder
; Gabrielle Fausel, a Principal Planner at the NJTPA, presented on an update to the NJTPA’s Freight Activity Locator
; and Anne Strauss-Wieder, director of Freight Planning at the NJTPA, presented on the Goods Movement Strategies for Communities