Utah's Economic Growth

Utah's remarkable population growth has sparked a surge in demand for housing, services, and goods which has greatly benefitted industrial real estate. A recent study conducted by the Kem C. Gardner Policy Institute at the University of Utah provides valuable insights into migration patterns within our state and specifically the Wasatch Front region which includes Davis, Salt Lake, Utah, and Weber Counties.

To effectively address the evolving demands, Utah must align the development of industrial real estate with migration patterns and it has been taking significant steps to do so already. By investing in strategically positioned facilities in the northwest quadrant and along the Salt Lake/Utah County border, distributors and manufacturers have begun streamlining supply chains, reducing logistic costs, and generating new job opportunities.

Developers’ conservative approach has not only fueled economic growth, it has also enhanced Utah's appeal as a destination for businesses as a regional hub serving Nevada, Idaho, Arizona, and other growing western states despite national economic challenges. With Utah boasting the best economic outlook for its 16th year while holding the nation's youngest median age at 30.5 years and the highest average household size our state is primed to see significant future internal and migrant-driven population growth which will require continued significant investments to service.

The Power of Onshoring

In Part 3 of our onshoring blog series, Jay Flynn explores how the convergence of robotics, supply chain optimization, and a growing focus on manufacturing efficiency has fueled a compelling movement to bring manufacturing back to the U.S. and neighboring countries. Click here to read: https://lnkd.in/gHCHE6y5

Sustainability Through an Industrial Lense

Sustainability is always a topic that should be followed closely, it is forward-thinking that allows us to leave the world better than we found it. So many initiatives empower us to improve our world and the direction of our planet's sustainability. Our President and Managing Broker Michael Jeppesen has been a LEED AP or Leadership in Energy and Environmental Design Accredited Professional since 2006. Michael’s passion for improving our world is inspiring and leads others in the IPG office to make environmentally friendly decisions. Not only is Michael LEED certified, but our IPG office is as well and in 2010 the building was awarded a LEED silver award for being sustainable in multiple categories. This effort is a perfect example of how one person leading the charge towards a cleaner earth can have a domino effect for others to also make the change. 

This same effort is now being seen in the industrial market due to companies being asked to reveal greenhouse gas emissions. Developers of industrial buildings are finding ways to build a net-zero energy and carbon-neutral building. With the help of sustainability consulting firms like Gaia, developers can now use the LEED Volume program which provides an environmentally friendly design to follow to ensure that the building is LEED certified. IPG’s Vice President and Senior Property Manager Chris Delong is very familiar with the effort it takes to create a sustainable building. He has made efforts to incorporate roof-top solar panels, LED lights/light studies, bee-keeping, and environmentally friendly HVAC systems to infuse sustainability into the industrial environment of each building he oversees. Michael, Chris, and many others have made strong efforts and contributions to make the world a cleaner place and with the path that developers are taking, industrial buildings across the country will be able to have the same effect. 

High Flow-Through Logistics Gains Recognition in Industrial Real Estate

High flow-through logistics or “HFT” for short, is an up-and-coming style of logistics that focuses primarily on the movement of goods instead of the storage of goods. This facilitation starts with a particular mode of transportation dropping goods at this logistics center where they are then in the “last mile” location to be delivered to the final destination from that location. These locations are mostly located in large cities, hubs for logistics, and the transportation of goods. Examples of these facilities include cross-dock truck terminals, on-airport cargo facilities, and drayage yards, which are just a few examples of high flow-through locations that allow for the efficiencies of the supply chain to improve from the facilitation of distribution. 

The growth of this style of logistics is mostly due to the rise in popularity of the direct-to-consumer shipment method, which makes these high-flow-through facilities crucial for timely delivery. This trend allows for quicker delivery to the customer and people love the convenience factor of quick shipments to their houses. If a company is capable of providing convenient delivery methods, then high flow-through facilities will consistently grow due to the demand. The supply chain and logistics have been subject to incredible amounts of change for many different reasons, this adjustment is just one part of the uniqueness of the modern supply chain our world depends on today.

The Government Steps in to Help the Supply Chain

As has been the case in recent years, the supply chain globally has faced numerous challenges and lots of delays. The delays lead to inconsistencies for businesses and the price for companies to transport goods has increased. This is partially due to the challenges that the supply chain provides and partially due to inflation and interest rates as well. These issues need solutions so that producers, transporters, and consumers alike can ease the financial stress that the backups and rising rates have caused. The government, and more specifically, the Department of Transportation have gotten the ball rolling on an initiative titled “Freight Logistics Optimization Works” or FLOW for short. The goal of this initiative is to use the power of communication in the private sector of logistics to initiate an easement of lag and rising rates. 

The communication is derived from companies sharing data and viewpoints of the supply chain enterprise so that transparency can be used as a catalyst for working towards a cleaner and more efficient supply chain. The DOT will work as an independent steward to provide a shared view of our national logistics system, the goal of this facilitation is to make importing and exporting more efficient so that everyone can save money and relieve the tensions at ports, air cargo, trucking, and warehouses. This initiative is in its early stages and it will be fascinating to follow the supply chain to see how this affects its efficiencies. 

Below is a short list of initial partners involved in this initiative:

Port Authorities: Port of Los Angeles, Port of Long Beach

Business: Albertsons, Target, Land O’ Lakes

Logistics and Warehousing: FedEx, Prologis, UPS