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May 15, 2018

The Newest Development Challenge: Transportation

ALM GlobeSt

Kelsi Maree Borland

From parking to dense urban development to industrial access, developers across asset classes are innovating their approach to transportation.

Transportation needs-whether we are talking about parking requirements, last-mile delivery or driverless cars-are changing. At RealShare Southern California, developers across asset classes talked about how they are approaching these changes in their current projects on the View From the Top panel, which included speakers Lawry Meister, owner and president at Steaven Jones Development Co.; Randy Jefferson, executive director of project development at LT Global Investment; and Joseph Vargas, president at Wonderful Real Estate Development, with moderator Rick Putnam, SVP at Kidder Mathews.

Meister, whose company focuses on creative office projects, recently utilized an automated parking system in a project to fulfill the parking requirement within a limited space where subterranean parking was not an option. They used a system called Auto Park It, which is a stacked automated parking system. The retrieval time for each car is about one minute, and it can remember the estimated time an employee leaves the office to prep the car for the owner. This type of system is a good intermediary for developers concerned about dedicating a large amount of square footage to a parking lot that may be obsolete in the next decade.

Jefferson is also looking at transportation needs in his massive mixed-use development project in Anaheim. "As we get into urban living, we need to deal with transportation," he said on the panel. "We still have problems with the first and last mile. There are tremendous opportunities. We are getting to the point where a car is a different animal than it used to be." He added that they want to build a truly urban project in Anaheim, but they need to build a transportation infrastructure to support it. The project itself has been delayed because of excalating construction costs, and Jefferson said that this has been a good moment for the company to pause and consider different approaches to transportation infrastructure and how "to look at it differently."

Vargas is looking at transportation from yet a different angle. As an industrial developer, he is concerned with space and access for trucks. With infill markets nearly built out and the Inland Empire seeing fewer developable land sites, his firm has turned to the Bakersfield market, which has access to both Northern and Southern California and the ability to reach a population of 50 million people within a days drive. As an industrial market, the area is still emerging, and Vargas says that the firm is building a trophy asset to attract users. "When you are building into an emerging market, you need to build a trophy building," he said. "This is a trophy building."

While transportation was definitely the hot topic on the panel, the speakers also discussed the rising construction costs. For Jefferson, those costs have been the cause for delay in the project. "Escalation is something that you have to deal with. If is goes up into double digits, it becomes something negative because it eats into your proforma," he said. "Construction costs need to get to the point where they are predictable. There is such a huge demand on labor that you are getting less equality for more money."

For the full story, go to the GlobeSt.com.

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