Mike Grella

#FLEXKC Panel: Cold storage is next frontier for "on fire" Kansas City industrial market

Kansas City's industrial market remains strong, with more than 3 million square feet of speculative space currently under construction and 1.3 million SF completed in the first quarter.

But in order to succeed in the rapidly changing, omni-channel marketplace, communities and companies need to remain flexible on all fronts, ranging from operations to incentives to workforce development. That's the consensus of panelists at KC SmartPort's 2019 Industry Briefing, FLEXKC.

"While the economy and most indicators point to continued growth, the need for companies to increase flexibility in operations and hiring practices has never been greater. That is true of how companies build, use and occupy space as well,” said KC SmartPort President Chris Gutierrez.

One of the next waves in industrial development will be "Food on Demand" as consumers seek convenience and freedom from the kitchen. That means cold storage facilities are landing at the top of the shopping list for those scouting industrial locations.

"We are seeing an uptick in that sector," said Colby Tanner, BNSF Railway assistant vice president. "Over the last 18 months we have started to get a lot of inquiries from the cold storage sector asking how can we locate along the rail line or have rail access."

Although they come with significant investment and a subsequent boon to local coffers, cold storage facilities can present a challenge when it comes to incentives.

"These are really high-dollar projects, but they require a non-traditional workforce. So from an incentives perspective, you have a project with a huge investment but the challenge will always be workforce,” said Ann Petersen, Cushman & Wakefield managing director. 

Other barriers to entry include higher insurance costs, environmental impacts, and margins squeezed by waste.

"Food on demand is a challenging business, " observed longtime Amazon Site Selector and Keynote Speaker Mike Grella. "I think there’s room for growth there, but we are still in a period of experimentation and iteration." 

For a full event recap, click here.