News

Warehouse Hubs and Repositioned Spaces

11/24/2020

Industrial/Warehouse

E-commerce sales have increased every year since inception. After the stay-at-home mandates were enacted due to the COVID-19 pandemic, e-commerce sales absolutely skyrocketed. In order to continue to fulfill this rising demand, big corporations have begun seeking large industrial and warehouse spaces. Whereas before, one or two large central warehouses were the standard for product fulfillment and packaging, companies are now seeking to purchase multiple flagship hubs. These distribution and fulfillment hubs are central to high-population areas.1 As a result, e-commerce companies are able to keep up with demand, decrease transit time, and save on transportation costs. Furthermore, companies can store a larger product backlog to proactively counteract potential delays due to COVID-19.2

The global pandemic is anticipated to continue to accelerate the need for more industrial spaces3. Therefore, it is important to know what differentiates industrial buildouts from other construction niches. Warehouse buildings have specific requirements for optimal production. By looking at some of HBC’s warehouse and industrial projects, we can examine these commonalities.  

Manhattan Beachwear

An existing two-story warehouse was transformed into a hybrid office and production area to accommodate a leading swimwear manufacturer. Constructed out of structural steel, the high ceilings and walls within the distribution area required special consideration. Design rooms were enhanced by adding custom grids on walls. Now, the Manhattan Beachwear facility manufactures, packages, and ships their products to some of the top retailers across the world.

Kavo Kerr

In 2017, Kavo Kerr expanded their real estate portfolio across North America. Included in this expansion was the addition of a manufacturing warehouse—a 100,000 square foot behemoth in Pomona. To prepare the existing structure for the high demand of one of the largest dental manufacturers in the world, the space needed significant water and natural gas service upgrades. The electrical capacity was also increased from 800 amps to 8,000 amps. Minimal office spaces and a mezzanine were folded into the mostly industrial floorplan. The warehouse itself was equipped with a new cooling tower and wastewater treatment center, HAZMAT storage enclosure, hydrogen mass storage assembly, and medical gas distribution system. With the new logistics center in place, the client can now produce and ship an excess of half a billion dollars’ worth of dental products worldwide.

Repositioning

All buildings have a shelf life. When approaching the end of a building’s lifespan, the building owner can choose to have it torn down or repositioned. Repositioning incorporates a portion of the existing structure into the new floorplan while reconfiguring or adding other assets. Landlords are increasingly turning to repositioning as the solution to a variety of factors: a changing workforce, limited financial and spatial resources, and uncertainty due to COVID-19.4

There are several benefits of choosing to reposition an existing structure, including:

·  Shorter turnaround times compared to traditional ground-up construction4

·  More cost-effective than complete relocation or demolition and rebuild5

·  Ability to adapt more quickly to a changing workforce4

·  Opportunity to upgrade systems and structures to more sustainable or code-compliant alternatives5

·  Low-effort, high-impact way to enhance property value5

·  Preservation of materials with historical or cultural importance5

Let’s take a look at some of HBC’s repositioning projects to see what happens when buildings get a new lease on life.

SAP (Hanahaus)

The building that is now occupied by SAP’s coworking concept, HanaHaus, was originally developed in 1954 for the Newport Balboa Savings Bank.6 Inspired by the futuristic Googie style, architect Wenceslaus Sarmiento crafted the structure to resemble a “sea bird returning to safe haven.”7  

Fast forward six decades and the sea bird has been revitalized while preserving several elements and materials from the original building, such as bank vault doors. Additionally, a custom radius staircase leads from the main entrance to a mezzanine on the second floor for additional seating. All office fronts consist of bottomless track systems, allowing for versatility, openness, and optimal lighting. A panoramic door system enables a seamless walk from the interior to a rear deck that overlooks Newport Bay. The overall coworking experience is complemented by a full-service Blue Bottle Coffeeshop. By fusing innovation and historical context, the SAP project adds another layer of history to the Via Lido building. In doing so, the team behind the renovation won a CoreNet Global REmmy Award in 2019 for “Innovative Workplace Less Than 50,000 Square Feet.”

Sunset Media Center

The original L.A. high-rise on Sunset and Vine, now referred to as Sunset Media Center, was built in 1972. Thirty years later, Kilroy Realty Company teamed up with HBC to freshen up the 22-floor structure. Without disrupting the existing tenants, the entire first and second floor public areas and lobbies were renovated to reflect a modern, laidback aesthetic. A portion of the 2nd floor concrete deck was punched out to create a two-story mezzanine, complete with glass guardrails. A structural glass curtain wall was installed at the building’s entrance. Back-painted glass and stainless-steel trim add an embellished finish to the interior that complements the extensive elevator upgrades. Custom artwork by California-native, David Flores, is featured throughout. Exterior improvements included new storefront and glazing, concrete stairs, tower lighting, hardscaping, and landscaping.

Without altering the Los Angeles skyline, Sunset Media Center was positioned to attract the most high-profile Los Angeles tenants. Simultaneously, the repositioning project caught the eye of industry leaders. It was awarded the TOBY Award for Best Renovated Building by the Building Owners and Managers Association of Greater Los Angeles (BOMA-LA) and the Commercial Real Estate Award (Gold) by the Los Angeles Business Journal. The team’s commitment to wellness and sustainability also resulted in a Fitwel Certification and LEED Silver Certification.   

Footnotes

1.  Kennedy, Clare. “A Costco Made Into an Amazon Hub Sells in One of LA's Priciest Industrial Deals of Decade.” CoStar, September 29, 2020. https://product.costar.com/home/news/470912093/.

2.  Drummer, Randyl. “Industrial Leasing, Construction Set Records as E-Commerce Expands in Pandemic.” CoStar, October 15, 2020. https://product.costar.com/home/news/94450641.

3.  CBRE. “2021 U.S. Real Estate Market Outlook.” Accessed November 23, 2020. https://www.cbre.us/research-and-reports/US-Real-Estate-Market-Outlook-2021.

4.  Martinez, Cynthia. “Three Things to Consider for a Building Repositioning.” Interior Architects Blog, March 17, 2016. https://interiorarchitects.com/three-things-to-consider-for-a-building-repositioning/.

5.  Yuan, David, Robert Mankin, and Chris Beza. “How to Reposition a Building to Meet Changing Expectations.” NAIOP, Fall 2019. https://www.naiop.org/Research-and-Publications/Magazine/2019/Fall-2019/Business-Trends/How-to-Reposition-a-Building-to-Meet-Changing-Expectations.

6.  Lawson, Richard. “Dockside Coworking? It’s Possible at This Conversion of Googie-Style Newport Beach Bank.” Loopnet, October 2, 2019. https://www.loopnet.com/learn/dockside-coworking-its-possible-at-this-conversion-of-googie-style-newport-beach-bank/552557040/.

7.  HanaHaus Blog. “HanaHaus Newport Beach: A Fascinating Building with a Long-Lasting History.” April 26, 2019. https://www.hanahaus.com/blog-1/2019/1/3/newport-beach-a-fascinating-location-mpsfz.