Last Mile Logistics: Case Study, Rosemount, MN

Last mile logistics is a hot topic in today’s retail environment. We have seen the decline in the standard retail storefront over the past few years, with many of these storefronts have been replaced by Amazon Prime trucks zipping across the freeways, fulfilling orders placed online for items which used to be purchased at the neighborhood store. So, what do these changes in consumer habits, and therefore changes in supply chain logistics, mean for builders, commercial real estate practitioners, investors, and owner/operators? We offer a definition, considerations, a case study and additional resources to consult for logistics site considerations.

Definition of Last Mile Logistics

So, just what does the term “Last Mile Logistics” mean? According to Business Insider, “In a product’s journey from warehouse to customer doorstep, the ‘last mile’ of delivery is the final step of the process – the point at which the package finally arrives at the buyer’s door.”

E-commerce is driving the demand for these last mile logistic sites, and there doesn’t appear to be an end to the demand in the foreseeable future.

“Businesses have begun to develop new technologies and experimental supply chain models to increase parcel volume, expedite deliveries, and delight customers – all while trying to cut costs.” Business Insider

E-commerce is growing at a steady rate of 15% per year. Current logistics portfolio for current retail is only 9.6% of the market – there is a lot of room to grow! Enter Industrial Warehousing.

What type of building is ideal?

warehouseAccording to information presented at this year’s 2018 Investment Real Estate Symposium, held on Tuesday, October 2nd, 2018, the following building features are ideal, if not necessary, for successful logistics operations:

  • Clear heights of 40’
  • 500,000 SF facility sizing
  • Mezzanines
  • Food Related / Cold Storage
  • Infrastructure for automation
  • Rapid delivery systems

During this symposium, the current state of the logistics industry was discussed. Currently, the availability of buildings with each of these features, is significantly down. Therefore, rental rates have risen in response to the current supply (or lack thereof). As a result, many logistics companies are turning to new construction to build what is needed for modern delivery systems. “The growing trend is for organizations to build or take advantage of urban warehouse space and have easy access to products for fast delivery,” according to SupplyChain 24/7.com. If new construction is your best solution, as an owner/operator, there are many considerations as you take that next step.

What are the ideal distribution center considerations?

According to AreaDevelopment.com, you need to ask the following questions when considering your next distribution center location:

  • Where should last-mile considerations fit into your site scenario?
  • Is there such a thing as an ideal number of last-mile DC’s?
  • Are there ideal last-mile DC venues?
  • Exactly how close should a company’s last-mile facilities be to its customers?
  • How important are traffic patterns?

Each business is unique as are the consumers they serve. As a result, a site that may work for one business, may not for another. As a result, our team created a case study on one site to illustrate the various considerations in the selection of a distribution center site.

Case Study: Rosemount Business Park – West, Rosemount, Minnesota

Aerial 2 with Outline 2017-1The Rosemount Business Park – West site is located at the southeast corner of Highway 3 and County Road 42 in Rosemount, Minnesota. It is situated on the west side of the established business park, which is already home to This is a +/- 35 acre site is zoned BP – Business Park District which allows for office warehouse, warehousing, wholesaling and distribution facilities. Additionally, the site offers the following features which would be of interest to a site selector for a distribution facility:

Transportation

Rail – This site is located on a Progressive (PGR) short line rail line (Class III).

Highway – in addition to being located at the intersection of Hwy 3 and CR-42, the site is located approximately seven (7) miles west of US Highway 52 (which runs north / south between St. Paul and Rochester) and is accessible to Interstate 35 via County Road 46.

Airport – The site is located approximately 15 miles south of the Minneapolis-St. Paul International Airport (MSP)

Demographics / Workforce

(Data Source: City of Rosemount, Economic Development, Kim Lindquist, via this LINK)

Businesses can obtain customized training programs with Dakota County Technical College (DCTC), a part of the Minnesota State college system.

Approximately 80% of Rosemount’s population of almost 23,000 is in the workforce.

Available housing for a growing workforce is growing at an average rate of 73 new units per year, with ample commercial options (250+) for residents, an excellent education system, and recreational areas.

Utilities

  • Natural Gas – MERC, MN Energy Resources
  • Electric – Xcel
  • Fiber is available to the site
  • Water/Sewer are both available to the site

Economic Incentives (via State of Minnesota)

Many economic incentives exist, but you will want to consider which incentives (if any) make sense for your business. Tax Increment Financing (TIF), and Tax Abatement programs exist, but may require a specific number of new hires within an allotted timeframe. As more automation occurs, a company may want to weigh the pros and cons of tapping into these incentives.

Affordable land pricing – currently listed at $3.75/SF, this is an affordable option for a warehouse / distribution center, ideal for cold storage, logistics, and more.

Build-to-Suit (BTS) – This site is currently divisible to a customer’s needs and the owners are offering a build to suit option on this site.

Design/Build – APPRO Development is a trusted resource to assist with all design build scenarios (including working with an owner through city process). Our expert team has been working on projects like this for more than 30 years. A variety of options exist for this site (including dividing the lot).

Learn more about this site at: Rosemount Business Park, Rosemount, MN

As you can see, there are many features of a site to consider. We hope that this example helps you in your search process. If you would like additional information on the site referenced in this Case Study, or links to any of the articles referenced, please see the resources section below, or feel free to contact our team with any additional questions you may have.

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Resources

Drones in Commercial Real Estate and Industrial Construction


Drones in Commercial Real Estate and Industrial Construction 

Drones in Commercial  Real Estate and Industrial Construction? They’re talked about everywhere and their benefits are sometimes far reaching or yet to be tested (I am curious to see how a drone can deliver a package during a MN snowstorm without plummeting to its death due to the added weight of the snow). Naturally, the popularity of drones made us ask; how can drones benefit those of us in the commercial real estate or industrial construction fields? 

(Click on photo at left for more information about this Warehouse Addition and to see more aerial photography taken by a drone.)


 

We (at APPRO Development and CERRON Commercial Properties) decided there could be some benefit to utilize drones, so we embarked on a mission to learn more. Upon doing some research, we learned it’s important to find someone who is:

  • Qualified to operate a drone, especially in metropolitan areas or near airports
  • Knowledgeable of regulatory laws and keeps current with the changes
  • Carries insurance for the operation of their drone
  • Educated in photography and has the needed equipment to provide high quality photos

 

After finding a “pilot” whose skills we were confident in, we were able to utilize drones in numerous ways over the past year to:

  • Capture stunning images of buildings post-construction as part of construction photos file.
  • Obtain unique perspectives on commercial buildings and office suites for marketing purposes.
  • Investigate issues with joints, roofs, HVAC and other systems that normally require rooftop access, a bucket lift or a REALLY tall ladder.

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Commercial Real Estate Marketing photo – CLICK Here for the VIDEO!

Click HERE to learn more about this Lakeville Commercial Land for sale!

 Why use drones???

The benefits in utilizing a drone allowed a significant cost savings over other methods, such as aerial photography completed by a pilot and a photographer. In fact, we may have just done without the wonderful photos had it not been for the savings using a drone.  In addition to our company having a drone pilot that we hire for imaging, some of our subcontractors also have access to a pilot to provide insightful feedback on existing building conditions.

Structural engineers have learned to utilize drones for inspecting hard to reach places, such as under bridges or high in the air to view windmill or cell towers, smoke stacks and other tall buildings. Interestingly, drones are also being used to assist in mapping of rail lines.

While there is much debate surrounding the use of drones, some practical applications, which are non-obtrusive to the general public, are indeed beneficial to the Commercial Real Estate and Industrial Construction industry.

 

 


 

 

If you have an existing property you would like to market for sale or lease, or have a commercial building in need of repair or expanding, please contact our team to assist you. Perhaps we may incorporate the use of drones into your next project!

 

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For more information on Commerical Real Estate and Construction,

please visit our “Industrial building construction process” page for additional information on how the construction process works and may benefit you and your company as you consider your future space needs.

A drone was used to view the roof and parking lot of the APPRO Development and CERRON Commercial Properties building. The aerial perspective helped determine maintenance needs and cosmetic improvements to enhance the aesthetics of the property.

 

 


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Industrial Building: Construction Process in MN

The industrial building process has a variety of considerations and steps to navigate. The team at APPRO Development seeks to simplify the construction process in MN by sharing some insight for local business owners considering this construction option.

In this blog article, you will learn about:

  • Considerations for buying vs. building
  • The timeline involved in constructing an industrial building
  • Access to a current list of industrial sites for sale

 

one.pngFirst, once you have determined that your space needs require a change, you will want to consider if buying an existing building or building a new facility is the best choice for your business. Our team created a “Buy vs. Build” checklist to help with some of these key considerations. Once you have reviewed this chart and have decided construction may be your ideal solution, you will want to consider the time it takes to construct a new facility.

two.pngThe next consideration is the overall timeline for constructing a new facility. Our “Project and Process Timeline” takes into consideration all of the steps along the way – from site selection, to development and city process steps, to design work, through to the completion of construction. This insightful map helps you navigate the entire process.

three.pngFinally, once you decide that you want to move forward with constructing a new industrial building, you will want to start your site search as soon as possible. Our team has a few options to help you with this part of the process. You may search our site for the properties we currently have actively listed. Additionally, you may request a site search and our team can expand the search to additional properties available.

Hopefully, this information is helpful for you and your team as you consider constructing a new industrial facility. Our team is available to help assist you wherever you are in the process. We have many additional tools, checklists, worksheets, and more to help you as you go.

This is an exciting time for your team! Our team would be honored to help you – we can be reached by clicking on the following link:

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