The industrial real estate market has been booming for several years and is anticipated to continue its upward trajectory for the near future. Fueled by increases in e-commerce, a strong economy and a heightened desire to keep inventory levels high, the demand for industrial buildings remains strong. In fact, Q3 2021 saw a record-breaking 448.9 million square feet of industrial space under construction in the United States.

A lesser discussed topic in the industrial market is that of continued maintenance. Concrete tilt-up buildings make up a large share of the industrial market, and while they’re relatively simple building systems, they do require maintenance over time.

Today, we will spend some time discussing the common maintenance items that building owners and users should keep in mind to keep their assets in premium condition.


1. Major Mechanical, Electrical, Fire Protection and Plumbing Systems

Every building contains some form of mechanical, electrical, plumbing & fire protection systems (MEPF), ranging from very simple to extremely complex. Best practice is to hire licensed contractors to perform routine maintenance on these systems, completing items such as filter and belt replacements on HVAC units; routine inspections on circuit breakers, and bulb replacements; fire alarm tests; sprinkler system flushing; and more.

Once a contractor turns over the building to the owner or manager following construction, the maintenance of these systems is no longer the responsibility of the general contractor (barring any contractual agreements to the contrary).

While it’s generally advised for the original vendors to complete the maintenance work, it is also possible to hire another company for this purpose. Remember to provide clear expectations to ensure you acquire comparable proposals for maintenance work and review the maintenance contract at regular intervals.

As part of the close-out process, a good general contractor will provide contact information for the installing subcontractor team so the owner can consider retaining them for ongoing maintenance.

2. Roofing Systems

Industrial buildings are commonly a shallow sloped roof structure with a built-up roofing membrane, a Thermoset (EPDM) roof membrane, or a Thermoplastic (TPO) roof membrane. Each roofing type has different specifications for installation and maintenance. These include details on roof penetrations, drainage and maintenance requirements for best practices and maintaining the roof warranty.

Regular roof maintenance programs will investigate and repair, among other items:

  • The presence of debris, particularly in corners or drains
  • Cracks or tears in the roofing material
  • Soundness of the material at roof penetrations
  • Soft spots signifying rot or structural failure
  • Sheet metal cap flashing, scuppers and gutter inspections
  • Pooling water

Finding these anomalies as early as possible lowers the cost of repairs. Some items may even be included in the base maintenance agreement.

Depending on the complexity of the roof system, the location of the building and the contractual agreement, roof maintenance will most often be performed on a quarterly or semi-annual schedule. It’s important to review the terms of the warranty documents for each particular roofing system. Neglecting roof maintenance will negate any warranties.

3. Exterior Painting and Caulking

Exterior paint and caulking are critical to maintaining a weather-proof building envelope. The specific type of paint and caulk will largely depend on the building’s geographic location and environmental conditions. For instance, here in the Pacific Northwest where wet weather is prevalent, we advise the use of elastomeric paint. This paint can help to bridge micro-cracking in concrete to prevent water penetration.

Caulking at panel joints, windows and doors, and other wall penetrations is another key part of weather-proofing a building. It’s critical that caulking be fit for the specific use, flexible enough to withstand some flex in the building and durable enough to withstand the local weather conditions.

As a general rule and especially in the Pacific Northwest, it’s advisable to review building caulk for defects and touch-ups, as well as to re-paint the exterior at five-year intervals, approximately. If your building is located in another environment, ask a trusted painting and caulking contractor what the recommended interval is for maintenance of these elements.

4. Interior Concrete Slabs

The quality of a concrete slab is primarily based on two factors: First, the quality upon installation; and second, the way it is maintained over time. Some recommended maintenance procedures include:

  • Complete regular sweeping to remove all debris from floor joints and traffic aisles.
  • Repair cracks or spalls as soon as they occur to avoid further degradation.
  • Spot clean spills as quickly as possible.
  • For polished concrete, utilize floor sweepers and cleaners at regular intervals, and utilize only manufacturer approved chemicals for cleaning.
  • Ensure forklift tires and other machinery wheels are clean and smooth.
  • Install chemical resistant epoxy coatings at all areas subject to regular drainage or chemicals.

It’s also advisable to caulk at all floor joints to prevent debris from accumulating. Regular forklift or machinery traffic traveling over debris-filled joints can quickly lead to damage. Without proper repairs, this damage can spread exponentially. Know that it is natural for concrete to crack. Strategically placed control joints and a firm foundation will help to minimize them. Minor cracking is not typically a structural issue.

5. Exterior Parking and Sidewalks

Parking lots are normally asphaltic paving or concrete paving, with asphaltic paving being the most common in the Pacific Northwest. These surfaces hold up well, but some maintenance over time is important to avoid the need for replacement. Below are some general tips to keep your exterior surfaces in tip-top shape:

  • Ensure that grades are sloped away from the building, including sidewalks and landscaping.
  • Install a seal-coat at regular intervals, particularly in heavily-trafficked areas.
  • Patch potholes as quickly as possible to prevent further degradation. If potholes routinely re-occur, consult an excavator or civil engineer for a more permanent fix, as this is likely a sub-surface issue.
  • Watch for ‘alligator’ cracking, where extensive cracking in a scale-like pattern emerges. This typically indicates a sub-surface issue and will need more than surface-level patching.
  • Pressure wash surfaces to prevent accumulations of algae or chemicals, particularly if salt or deicer is used in the winter months.
  • Consider installing bollards or parking stops to prevent vehicles from driving into pedestrian areas or damaging curbs.
  • Plant trees with root systems that will not damage nearby sidewalk or asphalt and allow them plenty of space from hard surfaces. The City of Portland has an approved street tree planting list that provides some guidance. 

While the cost for routine maintenance may seem high, the cost to replace areas of pavement or sidewalk is generally much higher.      

Final Thoughts

No matter which piece of the building we discuss, proactive maintenance is far more cost-effective than reactive maintenance. Engaging specialty contractors to complete regular maintenance protocols from the time the building is complete and over the course of its lifetime will lead to lower costs over time, a higher quality space and, in the case of leased space, happier tenants.

Continuing with our Year in Review series for 2021, this week we’re focusing on a few of our industrial projects. From ground up construction to tenant improvements, our teams have completed projects in a variety of sub-markets this year.


Frederickson DWA7

The Frederickson DWA7 project consisted of a new, 144,000 SF tilt-up concrete building to house an Amazon Distribution center. The new building features two 42,000 SF canopies and twelve high speed roll-up doors for van loading usage, a concrete loading dock with fourteen dock positions outfitted with pit levelers and overhead doors. Additionally, there is 14,000 SF of office and multiple remote restrooms.

To carry out the work, the teams logged and cleared a 38-acre site, constructed a full public road extension through the site, completed wetland mitigation and six stormwater infiltration galleries.

Perlo’s crews self-performed a variety of elements, including:

  • Structural concrete including foundations, slab on grade and tilt walls
  • Miscellaneous accessories installation such as lockers, plan holder racks, and roof accessories
  • Doors, frames & hardware installation

The project faced significant permit delays, including having to wait for the right-of-way work permit until late July in lieu of the anticipated February date. Post permit approval, the jurisdiction asked for several revisions to their required scope of work, such as changes to the rapid flash beacon specifications, adding a new video detection system, more light poles at the street, and more. With responsiveness and expediting materials, the team persisted to complete the work.

Final inspections occurred at the end of November, though the structures were complete and occupied several months prior. Once Amazon moved into the building, they asked us to complete multiple ongoing projects to modify the space for their needs. The neighboring tenant also requested additional work items, such as fencing and signage.

Senior Project Manager, Jacob Leighter, noted that

“Ray did a fantastic job of pushing the overall schedule. Several Amazon executives noted that we were much further ahead on our schedule that other general contractors working on buildings for them across the country. Michael, Mitchell and Nick really worked hard to juggle all of the County revisions and the work involved in carrying out that work.”

Perlo Team

Thomas Quesenberry | Project Director

Jacob Leighter | Senior Project Manager

Mitchell Powers | Project Engineer

Michael Terryah | Project Engineer

Ray Vigue | Superintendent

Nick Conner | Superintendent

Tim Dorey | Foreman

Kevin Ripp | Foreman

Kayla Davis | APM

Evelyn Moran | Admin Assistant

224 Logistics Park

224 Logistics is comprised of an existing multi-building campus with the primary emphasis on voluntary seismic upgrades to the main warehouse. This warehouse is approximately 1,000,000 SF and construction work included structural seismic work, re-roofing the entire building, as well as painting of the main warehouse and freezer buildings.

The building was constructed over many years, with the original building for United Grocers built in 1952, with multiple additions between then and now. The key plan to the right demonstrates the many additions and year.

The structural work included seismic upgrades with roof strapping and nailing during the re-roofing, new cast-in-place walls and footings, and wood beams for structural support. Interior work included demising walls to allow for multi-tenant leasing and separating the chilled areas from the dry goods warehouse space. Exterior work included painting and an asphalt grind and overlay, new skylights and roof accessories, roofing, roof crickets and drains, and sealing up gaps below the dock doors with fabricated screens. In addition, we replaced dock doors, demolished the banana rooms and all associated mechanical equipment.

The Perlo work crews self-performed the following scopes:

  • Seismic upgrades
  • Dry-rot repairs
  • Roof decking
  • Concrete footings Installation
  • Cast-in-place walls
  • Roof crickets and accessories  

The project was located in a residential area, so our teams spent time ensuring the neighbors The team completed approximately 3-months of discovery work to identify and clarify the full scope of the work required. Our teams began construction while the building was partially occupied, though it was vacant by the time the seismic upgrades started.  To accommodate the tenant, our teams started work the newest parts of the building, and then worked towards the remainder of the space as the tenant vacated.

Of the project, Project Manager Adam Smelley notes,

“The project was unique since the building was constructed from 1952 through 1991. About every 8 years they would do an addition, which meant that nothing was consistent. Additionally, maintenance hadn’t been done well. So, it was an interesting space to work in and find solutions to the problems we found.”

Perlo Team

Adam Smelley | Project Manager

Jacob Carr | Project Engineer

Eric Huth | Lead Superintendent

Mike Pillster | Superintendent – CIP Walls

Mark Helling | Superintendent – Roofing

Glen McDaniel | Foreman

Kayla Davis | APM

Brooke Carswell | Admin Assistant

Jadyn Bentley | Admin Assistant

OBRC New Office Building and Warehouse

This new can and bottle recycling center consisted of a new concrete tilt-up building with 38,000 SF of two-story office space and 103,000 SF of 28-foot clear height warehouse. The office space included a large entry vestibule, multiple restrooms and breakrooms, open workspaces, and executive offices. Uniquely, OBRC required Quiet Rock on all exposed warehouse to office demising walls, and all MEP penetrations had to be sealed to reduce warehouse noise and fumes from infiltrating the office.

Site preparations included a large retaining wall and an abnormally deep sanitary pump system, as well as extensive groundwater control with a new wetland mitigation pond. The presence of excessive groundwater required installation of dewatering well points during earthwork, site development and foundation installation. Permanent groundwater infiltration detention systems were installed to handle the excessive underground water and direct it to the wetland.

One challenge on this project included a delay in getting permanent power to the building through PGE. This required the construction team to build out the office space prior to having permanent power installed.  Special attention had to be paid to quality material delivery with limited lighting available during construction.

OBRC had a hard deadline to be moved out of their previous space.  Our team worked diligently with Clackamas County to ensure permits could be achieved and OBRC’s move dates could be met. The project duration was 10.5 months.  Perlo continues to work with OBRC to complete bottle drop facilities in multiple locations. 

Jacob Leighter, Senior Project Manager said,

“They were a great client to work with and I enjoyed being on their team. It’s great that we can keep working with them on other projects.’ Superintendent Darrell Budge agrees, stating that, ‘all of the players on this project were great. I really like the OBRC team.”   

Perlo Team

Jacob Leighter | Senior Project Manager

Darrell Budge | Superintendent

Isaac Hobb | Foreman

Kayla Davis | APM

Evelyn Moran | Admin Assistant

Columbia Distributing Headquarters TI

In addition to Columbia Distributing’s new warehouse in Canby, Perlo’s teams completed a second generation build-out for their new West Coast office headquarters, as well. This reimagined office space now includes workstations, private offices and 48 ancillary areas including conference rooms, a breakroom, collaboration areas and even a pub.

By expanding into this new space, the company is further allowed to grow and remain in close proximity to their warehouse. The space included high end finishes, complete with indoor plants. The pub is a highlight of the space. Perlo built the original core, shell and former tenant space, so we didn’t find any surprises in terms of the building itself. However, the project was  constructed in the height of the pandemic as well as the wildfires that ravaged the region. In spite of all this, the team kept the project on schedule.

Perlo teams self-performed the following scopes:

  • Miscellaneous accessories
  • Doors, frames & hardware
  • Plumbing pour back for trenches

Jordan Peterson, Senior Project Manager for space, said of the project,

“It was a great team. JLL was the owner’s representative and LRS was the architect. Despite COVID and wildfires and everything, the team was in good spirits. The project meetings were the most fun I’ve ever had. There was so much laughter. It was great” 

Perlo Team

Jordan Peterson | Senior Project Manager

Kory Stark | Superintendent

Joshua Swake | Project Manager

Composites One

The Composites One building includes a new, concrete tilt-up warehouse which needed to comply with H3 occupancy requirements. Of the 73,000sf of new building, 45,000 SF is being utilized by Composites One for their composite material distribution business which serves the hi-tech and wind energy manufacturing sectors. The remaining portion was built as speculative warehouse space for a future tenant, which Perlo recently completed for Article.com.

The project was built on a mitigated wetland, which had to be reviewed and approved by the Army Corp. of Engineers before construction could begin. In addition, this land was potentially an archeologically sensitive site, which meant that there was the possibility for native American artifacts to be found during excavation operations. This meant that a full-time archaeological representative had to be onsite to ensure no elements were disturbed if found.

Elements of the project included a small office, specialty auxiliary rooms for their materials that required specialty HVAC systems for temperature control and exhaust, as well as explosion proof wiring.

The H3 occupancy required the following elements be completed over the course of construction:

  • Fireproofing of steel deck, joists and columns
  • Explosion proof wiring
  • Gas lines run on the roof in lieu of inside like usual
  • Recessed interior slab-on-grade for containment purposes

Perlo teams self-performed the following scopes:

  • Concrete, including sloped slab on grade, foundations & tilt walls
  • Miscellaneous accessories installation
  • Doors, frames & hardware installation
  • Roof accessories installation

One unique element of this work besides the challenges that the Coronavirus pandemic presented was that the building team was located all across the country. The architect was out of Iowa, the owner in Chicago, the distribution staff in Texas, and another owner’s representative was in California.

As Senior Project Manager Jordan Peterson said,

“we talked to representatives from every region during each team call, and they compared lessons learned from across the country. The client knew what they were doing, and what they wanted, and we delivered.”  

Perlo Team

Todd Duwe | Project Executive

Jordan Peterson | Senior Project Manager

Regan Cloudy | Field Engineer

Jack Johnson | Superintendent

Wally Adkins | Foreman

Kayla Davis | APM

Evelyn Moran | Admin Assistant

Final Thoughts

Stay tuned for next week, when we look back at more of our completed in 2021 projects!

We have recently received a lot of questions about one of our most visible projects located at the corner of Tualatin Sherwood Road and 124th in Tualatin, Oregon.  That question is a resounding, ‘what is that large rock pile for?’ The simple answer is that this temporary mountain of crushed rock is a result of a mining operation to flatten a site that had 60’ of elevation change prior to the work beginning. Today we’ll explore beyond the large rock pile and provide an overview of the work taking place at Tualatin Sherwood Corporate Park (TS Corporate Park).  This 32-acre development is striving for LEED certification and will be home to three speculative industrial buildings with a completion date in early 2022.


Tualatin-Sherwood-Corporate-Park

The Tualatin Sherwood Corporate Park Development

This full site development includes three new industrial buildings with all associated site-work and public street improvements.  The three finished structures will include:

Building C: 271,581 sf concrete tilt-up shell

Building D: 145,624 sf concrete tilt-up shell

Building E: 62,212 sf concrete tilt-up shell

Each building is of concrete tilt-up construction with dock doors, drive-in doors, concrete interior slabs, ample parking and semi-truck traffic routes. Built on a speculative basis, these are currently available to lease through Jones Lang LaSalle (JLL) and Macadam Forbes.

The Excavation and Mining Work

To level the site, excavating company Kerr Contractors is completing more than 1 million cubic yards of excavation work, including the blasting and mining of nearly 600,000 cubic yards of rock. The visible rock stockpile is made up of roughly 1/3 of that yardage, with the prior 1/3 already consumed by off-site locations, and about 1/3 left to be mined and relocated. 

Tualatin-Sherwood-Corporate-Park

Of the crushed rock generated on the site, about 60,000 cubic yards have been used or will soon be utilized for building foundations, parking lot subgrades and the public access improvements to extend Cipole Road into the site.  The remainder will be used for other jobsites that Perlo and/or Kerr Contractors is completing or sold for consumption by other contractors off-site.

To accomplish the large rock removal operation, a concrete crusher was installed onsite with a weigh-station so that rock can be crushed, stored, then loaded, weighed, and sold directly from the TS Corporate Park site.  At completion, the crushing operation will be dismantled and removed.

The mining operation has consisted of blasting at least once weekly since the work began. The largest blasting work has been completed previously, with more surgical blasting and mining continuing from now until nearly the end of the year to round out that scope of work.  

To complicate the mining operation, the construction of the new concrete tilt-up structures began long before the blasting work was planned to finish. To accommodate the concrete pours, Perlo and Kerr teams have regularly coordinated to prevent damage to the new concrete. Some strategies to avoid concrete damage include:

  • Timing blasting to avoid vibration within at least 7 days of any concrete pour.  This may require blasting twice in lieu of once so that rock crushing operations can be maintained while concrete is poured and cures.
  • The installation of vibration sensors in the ground to track movement due to blasting and ensure that vibration levels are low enough to maintain the integrity of the building structures.

The mining operation is running 7 days per week and 24 hours per day to maintain the owner’s desired schedule.  Permitting took place through the City of Sherwood, as well as Tualatin Valley Fire and Rescue to ensure that communication and safety between the local areas and the site are well planned and maintained. So why is there such a large pile of rock? Quite simply, the mining and crushing is taking place faster than the rock can be sold and consumed off-site.  We anticipate that all the rock will be removed by year-end. Until then, we watch it grow, change, and soon be minimized to a level site. 

Site Utility Tie-ins

Previously undeveloped, the site needed all new power, water, storm and sewer systems to be installed. Logistically, tying these utilities into the site has been one of the challenges of the work.  The new sewer line, for instance, had to be tied into the existing city sewer system located across Oregon street at the Western corner of the site. The 12” pipe had to run very near to a local dental office, with boring under Oregon street to be completed. In addition to standard utility connections for the buildings, the development will include several new electric vehicle charging stations, complete with the infrastructure to provide adequate power to these units.

Unique Site Features

Aside from the significant excavation work, the site includes some unique features:

  1. A soil nail shotcrete retaining wall that is 15’ tall at its highest point.
  2. A natural rock wall adjacent to the shotcrete wall where the primary rock mining work is taking place. This wall is 40’ at it’s highest point.
  3. A new street extension to bring Cipole road into the site, complete with a new streetlight.
  4. Significant lengths of lock + load retaining walls near the street.
  5. Large onsite water retention ponds for stormwater management.
  6. Electric vehicle charging stations.

Critical Site Logistics

The presence of more than 75 trade workers and truck drivers each day means that site safety and clear logistics planning are critical to delivering a successful project. Though the site is quite large, much of it has been taken up by the mining operation and storage of rock. Additionally, there is the construction of three buildings, sitework, and the trucking needed to export the rock all taking place at the same time. These factors make for a logistical challenge that has taken expertise and extensive communication to overcome.

Some of the strategies we are using to ensure the safety and efficiency of the site include:

  • Amy Cook, a full time safety team member on the site to help maintain a safe construction site.
  • Regular site meetings with all subcontractors involved are held to maintain communication and coordination.
  • Clear signage and traffic routes onsite.
  • Pre-determined materials laydown areas and crew parking locations.
  • Extensive pre-planning and routine reviews and updates to that plan as the work progresses.

Extensive communications protocols, pre-planning and some creativity have led to a safe, clean and organized site.

LEED Certification

All three buildings are aiming for LEED certification at completion.  Some strategies used to attain this certification include minimizing contaminants in all building materials, and sourcing local materials. Additional measures for LEED certification will take place for the tenant improvement work when the spaces are leased to a tenant.

Final Thoughts

The TS Corporate project has been a shining example of complex site logistics and communications strategies.  As one of our more publicly visible sites, it has been an honor to have the opportunity to talk to so many community members about the work being completed there. We look forward to completing the project this Fall.

If you’d like to know more about our construction services or want to get in touch, please visit our services page or contact us here.

With significant challenges resulting from the COVID-19 crisis, it has taken extra dedication and teamwork from our people, clients, design partners and subcontractors to keep pushing through and getting things done. We take pride in delivering projects on time, with the utmost quality, no matter the circumstances. We wanted to celebrate this by looking back at some of projects in 2020 and give shout outs to the teams that brought the projects to life.

In partnership with our building community this year, we have:

Completed 8 million square feet of new or remodeled construction.

Donated to more than 14 local, charitable causes.

Hosted 3 blood drives in our office building – with one more planned before the end of the year!

Donated more than $15,000 in free meals to our community through our #rebuildtogether campaign.

Collected 420 coats and 63 toys for the Angels in the Outfield Holiday Store.

Employed 9 collegiate summer interns.

We are grateful to have so many partnerships within our community that allow us to employ the best people in the industry, and to positively impact the communities we live in.

Project Highlights

Although we work in nearly every market sector, Perlo is best known in the industrial market. So it only makes sense that we pay homage to this sector first. This week’s blog is dedicated to a few of the industrial projects that we completed in 2020.

Project Shakespeare – Columbia Distributing | Canby, OR

Columbia Distributing’s new warehouse on a 42-acre site is now the largest warehouse in Canby and one of the largest recently built in the Portland metro region.  The space allowed Columbia Distributing to consolidate its three locations in Northwest Portland into one place. Coined “Project Shakespeare” by developer, Trammell Crow Company, this project consisted of a concrete tilt-up shell with steel joists, and metal deck with a TPO membrane roof. Included in the facility is approximately 17,000 SF of class A office space and warehouse improvements consisting of 46 truck bays with dock pit levelers, parking for 91 truck trailers and space for an additional 56 future dock truck bays. Also included is a 53,000 SF cooler inside of the warehouse. 

Jacob Leighter, Project Manager at Perlo said, ‘the project was designed and set up very well from the beginning by the design team (LRS Architects and VLMK Engineering + Design), developer Trammell Crow and Perlo.  That allowed us to really push subcontractors through the finish line – on-time – despite the unexpected COVID-19 pandemic that hit during the last few months of the project.

The work was completed in June of 2020 and had a 13 month schedule duration.  Jacob notes that ‘the entire project team was fun, light hearted and productive. It was genuinely a great group of people with the same end goal in mind, and that made a fast-paced and complicated project feel easy.’

Owner
Trammell Crow Company

Architect
LRS Architects

Engineer
VLMK Engineering + Design

Perlo Team
Randy Cooper
Jacob Leighter
Dustin Vigue
Kathi Gehrts


JSR Micro, Inc.| Hillsboro, OR

The JSR Micro, Inc. facility is a new, 79,000 SF chemical blending factory in Hillsboro, Oregon. Completed in September of 2020, Perlo Construction had the overall responsibility under a design-build contract for survey, soils investigation, design, permitting, construction and commissioning. The client was looking for one-stop shopping so that a single party would be responsible for all facets of the project. The design was based on replicating an existing semiconductor liquid chemical mixing factory in Hokkaichi, Japan, modified for US permitting and building codes requirements. 

The JSR Micro, Inc. project was made up of concrete tilt-up construction with steel joists, metal decking and includes clean rooms ranging from class 100 to class 100,000. Specialized systems include an Ultra Pure Water (UPW) system, a nitrogen system, an Acid Waste Neutralization (AWN) system and Deionized (DI) water systems.

This project was complex and fast paced, and over the course of construction faced a variety of hurdles.  This project was the largest dollar value project Perlo has completed at more than 80 million and was 100% design-build with Mackenzie as our design partner.  Challenges included re-working the tank yard to meet local building codes, resolving a fire-proofing issue with the local inspector, and completing issuance of the Temporary Certificate of Occupancy during the wildfires, city closures and the COVID-19 pandemic.

Chris Gregg, who was the executive in charge of the work, said his favorite part of the project was the camaraderie of the building team.  The complexity and scope of the work was a battle, but all parties persevered to complete the project within the owner’s budget and schedule. 

Owner
JSR Micro, Inc.

Architect and Engineer
Mackenzie

Perlo Team
Chris Gregg
Matt Brand
Alicia Jeffords
Fred Lutz
Kyncade Hardy
Kathi Gehrts


Cipole Industrial Park (#1430) | Tualatin, OR

Cipole Industrial park included three new concrete tilt-up buildings in Sherwood, Oregon.  Built for Phelan Development Company, the speculative development brings 235,000 SF of industrial space to the market.  The tilt panels included specially cast-in-place designs, presenting an upgraded appearance on each building. 

These projects came with plenty of site specific challenges.  According to senior project manager, Jordan Peterson, the work had to include coordination of road improvements with the City of Sherwood, Washington County, the City of Tualatin, Northwest Natural Gas, PGE, Century Link and Frontier.  There were ‘lots of cooks in the kitchen’ in terms of involved jurisdictions and utilities.   

In addition to the many utilities and jurisdictions involved, the project teams had to be very careful to work around the existing businesses adjacent to the site.  This includes Hardwood Industries, Conrad Lumber and Columbia Corrugated Box.  They were all impacted by our construction work and were all cooperative, understanding and as helpful as possible. 

Owner
Phelan Development

Architect
Calvin Coatsworth Architects

Structural Engineer
HAS & Associates

Civil and Landscape Designers
AAI

Perlo Team
Jordan Peterson
Whitney Peterson
Ray Vigue
McKayla Marshall


Portside Logistics Park | Vancouver, WA

The Portside Logistics Park is a new, speculative warehouse in Vancouver, Washington.  At 290,000 SF, the project includes 39’ of clear height, four drive-through doors and 50 dock-height door openings.  The building has a 6 ½” thick slab and a plasticizer mix in the panels. 

Included in this project were design-build mechanical, electrical, plumbing and fire protection scopes, as well as a design-build sanitary lift station. 

This work was completed over the winter months, with constant rain while trying to complete the roof.  In addition, the COVID-19 pandemic hit Washington State near completion and made closing out the work difficult.  We were fortunate that Specht Development was the owner of the project, as they were fair, understanding and helpful, and also had great third party consultants on board to create a system of checks and balances for all.  Transparency and communication between all parties were key to overcoming these obstacles and finishing up the building the right way.

Owner
Specht Development

Architect
Mackenzie

Perlo Team
Chris McInroe
Adam Smelley
Tylor Kofstad
McKayla Marshall

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Despite what 2020 has thrown at us, we continue to push through for our clients. Join us next week for part two of our 2020 year in review series!

With uncertainty abounding about the economy in general, one thing is certain: the industrial real estate market is a good place to be. In fact, JLL is predicting that demand for industrial real estate in the US will grow by an additional one billion square feet by 2025. For reference, that’s an addition of more than 17,361 football fields’ worth of industrial space within the next five years.

While industrial buildings tend to shy away from flashy building materials and rarely make the cover of a magazine, they are nonetheless a critical part of our country’s infrastructure. These buildings are, among other things, where we manufacture, house and distribute both perishable commodities and consumer goods.  

Here we will explore a little more about the industrial real estate market as it pertains to construction, with a particular focus on the trends we see in the Pacific Northwest. 

Types of Buildings and Uses

Industrial real estate serves a variety of end-users and may include light manufacturing, warehousing and distribution, showroom space, light office, retail, movie production, or food storage and/or production, among other things. Buildings may be constructed in a variety of ways, most commonly of the following types:

In previous generations, concrete block was commonly used for exterior wall systems, but seismic concerns and inefficiencies with constructing large buildings has largely phased this method out. There is some speculation that Cross Laminated Timber (CLT) may be considered in the future for exterior building skins on industrial projects, as focus shifts towards more sustainable construction practices. 

The size of industrial projects varies greatly from small footprint buildings for single businesses, to warehouse and distribution centers spanning over one million square feet. In general, these buildings include wide open floor plans, often with rows of racking, equipment and forklift operations. Interior clear heights – the height from the floor to the underside of any obstructions at the roof structure – also vary, with heights climbing in recent years to 40 feet and beyond.

Industrial developments typically need easy access to freeways or other modes of transportation, such as airports or marine ports, and in more recent years are moving closer to consumer locations with the rise of e-commerce. They also require large, preferably flat parcels of land, ranging from a few acres, to 40 acres or more for very large buildings. Area traffic, permit and development fees and access to utilities such as power, water and gas also play a role in site selection. 

The Rise of Technology in Industrial Developments

One factor increasing the complexity of industrial market construction is the rise of technology use. Automation through the use of robotics has been on the rise for years. Forklift guidance technology via guide wires that are embedded in concrete slabs has been a part of warehouse construction for quite some time.  Increasingly, we are seeing even more technology that must be included in our building packages to accommodate loading and unloading at dock doors or embedding technology for driverless forklifts. It’s possible that as automation increases, the need for a skilled labor force nearby will decrease. These larger industrial buildings could then be located in increasingly rural locations, where land is more readily available and is less expensive.   

What Makes Developments Pencil

Development of industrial projects are all about dollars and cents, and a budget bust of even one dollar per square foot can mean a project doesn’t move forward. The material components that make up most of these types of buildings include:

  • Concrete
  • Rigid Insulation
  • TPO Roofing
  • Structural Steel
  • Rebar
  • Lumber

An increase in the price of these items can certainly affect whether a project moves forward or not. 2020 has seen relatively steady prices for projects. Some materials prices have decreased, and though labor prices continue to rise, many contractors are looking for innovative solutions to keep costs down, perhaps in anticipation of an economic downturn, to ensure they have a healthy backlog of work. 

In addition to tracking materials and labor pricing closely, the large site sizes that accompany industrial projects require careful consideration of the excavation work needed. In fact, one of the largest risks to an owner in terms of cost and schedule delays is the site work package.  Complications with building sites can arise from a variety of factors, including, but not limited to:

  • Soft soils
  • Hazardous materials abatement
  • Presence of large boulders
  • Increasing erosion control requirements
  • Site dewatering and discharge
  • Weather delays associated with moisture sensitive native material
  • Haul distances for importing or exporting material

As Perlo’s Senior VP of Operations, Chris Gregg says, “the earth work is a dance. You have to be familiar with the site, the risks, when to amend the soil, how to anticipate weather challenges and how to adjust the site strategy as the project evolves”. A strong contractor who is familiar with the site will have the best chance of managing the risks associated with it.  

A Cyclical Market

The real estate cycle is cyclical, and the industrial market is no different. Depending on supply and demand, we observe locally that the industrial market shifts between speculative construction and build-to-suit. In other words, when the market is ‘hot’, developers are willing to construct speculatively, without having a tenant in place to occupy it at the time they begin construction. When the market slows, we see developers wait to build until they have a tenant pre-arranged to lease the building, and then they build it to suit that tenant’s specific needs.

At the beginning of 2020 in the Pacific Northwest, we were very near the point in the cycle where developers were slowing their interest in speculative construction and moving towards build-to-suit only. With the onset of the COVID-19 pandemic, this trend has accelerated.  However, construction of industrial product has not stopped. As JLL reported in June, the pandemic has accelerated e-commerce demand within the US, as consumers seek to order more of their goods online. We are still seeing a need for these types of buildings across the Northwest.    

Though developers have shifted to a more cautious approach for development this year, they have not stopped purchasing land for future development. Investors have continued to buy and prepare for new developments and are poised with ‘shovel ready’ land when the right deal comes along. 

From the time land is purchased, an owner can expect the design and permitting process to take a minimum of six to twelve months, followed by the actual construction time. With this in mind, owners have to consider that if they endeavor to develop their own building, they will have to be prepared for an extended amount of time for the development and construction process to be complete.  

The Future of Industrial Real Estate

In the past several decades, we have seen changes in both the building types and materials used for constructing them, which has increased efficiencies in construction and utilization. However, increasing regulation of building codes and a lack of available land in some locations is making development more challenging. In the Pacific Northwest, we are seeing projects extend up and down the I-5 corridor more than in years past, as the supply of large, developable parcels decreases. 

At the same time, the rise in e-commerce needs across the country is inspiring some retailers to build smaller footprint distribution centers that are closer to their consumers in lieu of having only a few large distribution centers across the country. It will be interesting to see if this trend also lends itself to redevelopment of brick and mortar locations into small distribution hubs as consumers choose to buy online and demand fast delivery. 

The COVID-19 pandemic has also led to questions about the domestic supply chain. Will we see manufacturers make efforts to move production facilities back to the US? If so, the industrial real estate market will certainly benefit.

For the immediate future, all signs point to a strong build-to-suit market in the industrial space. We anticipate that deals will become more creative in terms of redeveloping existing property and responding to the needs of the booming e-commerce market.

If you are considering an industrial development, our preconstruction teams excel at providing preliminary budgets for consideration. Reach out here to start the conversation.