Industrial Park's Owner Bringing in Restaurants, Retail as Amenities for Workers
Office developers have in the past turned to restaurants, entertainment venues, fitness centers and shops as standard enticements for companies hoping to lure workers.
Now one of the world's largest industrial property owners is bringing in a developer to add these amenities to its giant industrial park just outside Miamito cater to its tenants and freshen up the utilitarian concept of the big-box warehouse complex.
Prologis Inc. has plans to add about 495,000 square feet of retail to its Beacon Lakes Industrial Park, potentially bringing in restaurants, recreational venues and home goods retailers as well as clothing and sporting goods stores. The sports entertainment brand Topgolf is pursuing approvals to build a Beacon Lakes location with high-tech, climate-controlled hitting bays, food venues, live events and music.
Industrial real estate consultants view Beacon Lakes' addition of retail amenities as the next evolution in industrial properties as technology advances and as companies need to recruit and retain skilled workers in a tight labor market.
"There is no doubt that the market for labor in our business and additional businesses in this economy has become more competitive," said Nick Kittredge, east region president at Prologis. "To work in a beautiful environment and have amenities at the ready is definitely a differentiating factor."
Stiles Corp. is developing the retail portion, which will be designed as an open-air shopping destination with landscaped paths.
Among the key factors allowing Beacon Lakes to add the retail segment are the park's critical mass of over 2,000 workers as well as a location adjacent to Florida's Turnpike and across from the Dolphin Mall in a densely populated area, real-estate executives said.
Beacon Lakes is home to logistics and e-commerce tenants such as United Parcel Service Inc., Amazon.com Inc. and Ryder System Inc. Prologis owns and manages 2.5 million square feet of industrial property at Beacon Lakes, with plans to develop an additional 1.6 million square feet over the next two to three years. NBCUniversal Telemundo Enterprises is building its new headquarters at the site, bringing as many as 1,100 more workers.
The industrial park workforce has also has been changing to include executives, engineers, salespeople and designers in addition to the usual warehouse and operations workers, said Brian Smith, a managing director at real estate services firm JLL, which markets Beacon Lakes' industrial space.
"We have a lot of executives visiting," Mr. Smith said. "We see the amenity base as a strong competitive advantage."
Top concerns for industrial tenants are the availability of labor and transportation costs, said Chris Zubel, a managing director at real estate services firm CBRE Group Inc. Training and hiring employees is also expensive, so these companies are looking for ways to keep them.
"If all things are equal, the occupier is going to go to the park that has amenities because it's easier to recruit and retain employees," Mr. Zubel said.
As an industrial market, the Miami area has served as a staging ground for exports to Latin America. The metropolitan area's population growth also has made the area an increasingly attractive industrial market. The vacancy rate in the Miami-Dade market fell to 3.8% in the first quarter, a decrease of 0.7 percentage point from the previous year.
Average warehouse and distribution rents rose 3.2% to $7.04 per square feet, according to real estate services firm JLL.
While it might be a new evolution of the industrial park concept, the Beacon Lakes project isn't something that can be easily replicated, Mr. Smith cautioned.
"The cost of land, the proximity to the right demographics, a lot of things have to fall in place to do something like Beacon Lakes," Mr. Smith said.
Write to Keiko Morris at Keiko.Morris@wsj.com
(END) Dow Jones Newswires
May 30, 2017 17:26 ET (21:26 GMT)