South to Midlothian. East to Forney. North to McKinney, and all over Fort Worth: Wherever you turn, logistics operations are growing in size, complexity, and sophistication.

As activity on new projects begins returning to pre-pandemic levels, Allen Gump says “it’s fun to work in a market with pros.” The EVP of Colliers International watches the future arrive daily from his home office window—as UPS, FedEx, Amazon, and unmarked white vans roll up like clockwork.

Gump, one of the commercial real estate experts in our feature “21 on 2021,” shares his take on what’s next in our Q&A.

What opportunities and challenges do you see for the logistics industry in 2021?

Logistics is an industry that’s consolidated over the last 20 years from being local warehousing businesses to very large multi-market corporations leasing millions of square feet. The sophistication level is far beyond the public warehouse of old. Most large warehouses today are either leased by, or internally operated by, logistics companies that have brought a new level of sophistication to the business of warehousing, trucking, and delivery of goods. What was considered accepted practices such as “just-in-time delivery” is now being rethought as logistics providers are realizing the new realities of inventory management. Logistics companies and their customers have seen what can happen when you don’t build in some growth and other contingencies.

As these logistics companies operate 200,000 to more than a million square foot warehouses, DFW developers have provided the required high-quality buildings to lease. Also, many developers have smartly purchased land sites and done the upfront work getting their sites ready for immediate development. DFW is well-positioned to make available the buildings these logistics companies need as their requirements get larger and larger each year. The buildings and sites are south to Midlothian, east to Forney, north to McKinney, and all over Fort Worth. The challenge is always labor and finding the best locations. Anyone involved in these transactions will tell you that labor analytics plays a major factor—far more important than the tax incentives that used to be a driving factor.

One opportunity might be that developers who planned to build a speculative building on a site chose to hold off because of COVID-19. That site is now available as a build-to-suit site. Pricing under a build-to-suit structure can have definite cost benefits to the logistics companies and their customers.

The tremendous availability of financing at low rates, land in all directions, and the hyper-friendly business environment that exists in Dallas-Fort Worth’s 13 counties give you what you need to get deals done.

What changes in the logistics sector have you seen during the pandemic?

The national logistics companies have continued to lease space. However, decision-making by industrial warehouse users was much more careful in the early months. We’ve seen that loosen up in the last few months. Amazon has continued to lease millions of square feet, and we’ve seen other companies lease or sign build-to-suit deals for millions of square feet.

My developer friends tell me their activity level on new projects is back to pre-pandemic levels. Industrial is the new retail. That’s why, as I work from home sitting in my home office, I’m used to looking out my front window seeing deliveries by UPS, FedEx, Amazon, and miscellaneous white vans arriving all day long at my house. If you can click it, you can buy it!

How has Colliers dealt with the uncertainty this year?

Colliers’ staff has kept us up and running the entire time. Staff has stayed engaged to get us what we need to service our clients. Tour books, market options surveys, whoever was available pitched in to make it happen. Our IT guys and gals have done a tremendous job keeping our computers running throughout all the challenges of working remotely. We’ve been one of the fortunate few that have stayed open, allowing us to go to the office to put together needed packages and use office equipment we can’t replicate at home. I know this hasn’t been the case everywhere.

What projects are you excited about?

My partner Allyson Yost and I have been lucky enough to be part of one of the largest build-to-suits this year, and we have a couple more in the pipeline. Over the last several years, we’ve been part of other large transactions and build-to-suits that I would have never dreamed would be possible early in my career (starting in 1984). I’m just so grateful to be in the Dallas-Fort Worth market where these deals are possible. Even though we mostly represent corporate users and logistics companies, we have the best developers and landlords in the country here in our market. The level of professionalism and competition in DFW is unparalleled in any other market in the U.S. It’s fun to work in a market with pros.

Dallas has been called the truck stop of the future because of the autonomous trucking companies coming here. How will that impact CRE in the region?

Dallas-Fort Worth has always been a major trucking hub, for both LTL (less than truckload—think Yellow/Roadway, RL Carriers, Averitt) and truckload (Schneider, Swift). We’re a “break-bulk” location due to our central location, interstate highways, I-20, I-35, I-45, and major intermodal facilities, such as BNSF and UP. It’s only natural that autonomous trucking would be here in a big way. As for its impact on the region’s commercial real estate, I would suspect that for those companies that are already here, which is most of them, it would have minimal impact.

They’ll have to still come to their existing locations to load and unload and perform truck maintenance. Those who don’t have facilities here will be looking for locations for “drop yards,” which I doubt will have a major impact.

Explain how logistics and Industrial real estate are connected.

There’s a difference between simply industrial and logistics. I’m never sure the vernacular is understood by the public. We happen to work with true logistics companies which is the basis for my answers. However, industrial warehouse leasing is a broader category than “logistics” which is a narrower focus. Especially the local businesses that lease smaller warehouses—say 20,000 to 200,000 square feet—are still part of the logistics network.

Those that are local businesses have been more severely impacted by COVID-19. We’ve seen some of those companies “stall” in their response to the pandemic, due to the unknown. We’ve also seen national companies choose to permanently close locations, but this is anecdotal and not a major shift.

The interview has been edited for brevity and clarity. A version of this story first published in the Fall 2020 edition of the Dallas-Fort Worth Real Estate Review.

Sandra Engelland contributed to this report.

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