At first glance, it might seem strange to build a 50,000-square-foot distribution center without a company lined up to move into it.
Especially considering that there is already more than 30 million square feet of available industrial inventory in the local market, in large part due to Louisiana’s oil and gas jobs disappearing as energy demand plummets.
So why, then, does the Baton Rouge area need another empty warehouse? Because there’s an exorbitant demand for it.
Counterintuitive, perhaps. But with Amazon and national distributors scrambling for space as the inventory delivery market for retail products and industrial supplies evolves, developers seemingly can’t develop space fast enough. Amazon, which is developing a 63-acre site in Port Allen, is the biggest name, but many non-Amazons are also keeping their eye on the Baton Rouge area.
The COVID-19 pandemic has further amplified the importance of supply chain logistics, underscored by the increasing need to ship, receive and distribute goods efficiently. Moreover, as e-commerce continues to grow, so will demand from third-party logistics companies and last-mile delivery services.
This trend has not gone unnoticed by local and national developers. Currently, there are eight proposed or build-to-suit distribution facilities ranging from 50,000 square feet to 800,000 square feet that are being offered on the market, totaling nearly 2.9 million square feet of space.
But the Baton Rouge area doesn’t have enough space ready for use now—and is running short on industrial space for the distributors that already are here, let alone accommodate a company that would want to open a facility here.
It’s a complex problem, one that can have an impact on the region’s future growth. Read the full feature from the latest edition of Business Report.
