Don’t forget development: Real estate pros say their sector is critical part of resolving supply chain crisis

Whether it’s in the stands where parents watch a son or daughter play sports or in mingling at a cocktail party …

Clark Machemer. (Crow Holdings Industrial)

Clark Machemer expects to hear it now. People are talking about supply chains. Constantly.

“And it just interests me so much that there’s interest in the general public in supply chains all of a sudden,” he said. “I went to school, took supply chain classes. I never thought I’d hear people talking about it outside of that or the business world on a daily basis.”

Machemer, senior managing director in the New Jersey office of national real estate firm Crow Holdings Industrial, expressed that the supply chain logjam that’s regularly making headlines is well-known for good reason.

Said headlines have pointed to the pandemic and a host of other trends coming to bear on the supply, demand and price of construction materials and consumer goods. The country’s ports are facing a record backlog of shipping containers, on top of road and rail delivery delays. Part of the task of the influx of federal infrastructure spending in the ensuing years is to address these now-exposed, longstanding faults in the supply chain.

In the meantime, Machemer is hoping something else becomes a topic of discussion: How municipalities might start to take a kinder view of local logistics-oriented development.

The proliferation of e-commerce businesses in key corridors of the Garden State, and the ensuing traffic congestion, has made some townships wary of hosting these logistics operations. And that’s meant for a slow approval process, Machemer said.

Machemer’s view is that the short-term supply chain bottlenecks have been exacerbated by an unfulfilled demand for logistics and distribution center development in New Jersey. In an example of the supply chain issue begetting supply chain issues, the priced-up raw materials used in the development of these logistics centers have only further slowed these projects down.

Meanwhile, companies are trying to onshore more products to stabilize an unbalanced supply chain, and center them closer to the red-hot demand of consumers, he said. Machemer is hopeful municipalities are convinced by the benefits of helping set up facilities that play a role in that.

“Planning appropriately, these centers could also accelerate local economics and provide jobs,” he said. “This boom we have isn’t going to last forever. They have to take advantage of the benefits that exist as they are right now.”

Joel Bergstein. (Lincoln Equities Group)

Joel Bergstein, president of real estate company Lincoln Equities Group, looks at the coming infrastructure projects as holding potential to improve the ability of traffic to move more swiftly and effectively through New Jersey, which he’ll note has worsened since warehousing went from being a sleepy industry to part of an increasingly busy local logistics network.

Bergstein expects the infrastructure bill to have an outsize effect on how these local transportation-related concerns get resolved over the coming years.

And he’s anxious about the possibility of the Garden State getting stuck in the slow lane.

“My feeling is, in the densely populated Northeast, we never seem to get our proportionate share of infrastructure dollars, even if I understand the need for federal dollars to go to rural areas that need infrastructure, too,” he said. “Sometimes, we come up short. And, hopefully, this time will be different.”