Jodi Summers = Industrial Real Estate

LOS ANGELES INDUSTRIAL REAL ESTATE SNAPSHOT ~ FEBRUARY 2013 > CONTAINER HEAVEN

January 31, 2013 on 9:51 pm | In Bravo, Charts + Statistics, Market Snapshot, New Developments, Trends, Uncategorized, world | 1 Comment

by Jodi Summers

This month, our Los Angeles Industrial Real Estate update is all about cargo containers…both in traditional and non-traditional uses.

Cargo volume at the ports is up for the year, which bodes well for Los Angeles Industrial real estate. The Port of Long Beach was proud to announce that they had their busiest-ever December for container imports, rising and impressive 18.9% over the same period a year ago. Btw, a busy December is not typical, as shippers use this time of year to import goods for the slower winter and spring retail seasons.

“Business at the Port of Long Beach is clearly on the upswing as the economy strengthens and international trade continues to support hundreds of thousands of jobs in Southern California alone,” shared J. Christopher Lytle, Executive Director of the Port of Long Beach.

Currently, an estimated 21,000 shipping containers arrive in the United States every day. Retired shipping containers are abundant in the United States. Port authorities estimate that over 700,000 used shipping containers are stockpiled on prime waterfront real estate without a significant use, purpose, or typical method for disposal, making them ideal construction modules.

Shipping container architecture has evolved as a form of architecture using steel intermodal containers (shipping containers) as structural element, because of their inherent strength, wide availability and relatively low expense. A container is often referred to as a TEU, or twenty-foot equivalent unit. A standard TEU is approximately 20 feet long and 8 feet wide. The most common height is 8 feet 6 inches, an ample ceiling height.

Cargo containers are a rather perfect sized box for building. Made of steel and wood, this product is stronger than conventional framing, stackable for creating levels and is readily available.

“There are a lot of different types of energy efficiency that cargo container-based construction brings to the table,” offered Leslie Horn, CEO of Three Squares real estate development company. “With the U.S. new construction industry desperate for ways to cut costs without undermining quality, green home construction gaining significant momentum, and a growth rate from $49 billion to $140 billion forecasted over the next five years, shipping container-based construction is an extraordinarily well-positioned solution.”

Shipping containers have been called an ideal building material as they are designed to carry heavy loads and to be stacked in high columns. They are also designed to resist harsh environments – such as on ocean-going vessels or sprayed with road salt while transported on roads. As all shipping containers are made to standard measurements and as such they provide modular elements that can be combined into larger structures. Construction involves very little labor. As they are already designed to interlock for ease of mobility during transportation, structural construction is as easy as stacking more containers. Containers can be stacked up to 12 high when empty. They also keep building costs way down. Containers may be purchased from major transport companies for as little as US $1,200 each. Even when purchased brand new they are seldom more than US $6000.

Many structures based on shipping containers have already been constructed, and their uses, sizes, locations and appearances vary widely. In 2000, the firm Urban Space Management completed the project called Container City I in the Trinity Buoy Wharf area of London. The London docklands development is composed of environmentally friendly work studios and live/work lofts stacked on top of each other to create a 5-story building.

Architect Nicholas Lacey and Buro Happold created a flexible design system that relies on component pieces instead of units. Instead of using a 1 container = 1 unit approach, their system relies on components in various permutations to create very livable, adaptable spaces. Aside from this Container City residential project, the system has been used in projects as diverse as classrooms, office spaces, residential units, retail spaces and even youth centers.

“Containers as architecture are just one of the ways in which we can look at objects and find new uses to them. The modular nature of the containers, their adaptability, and the fact that they can be found in industrial surplus make them an ideal prefab material,” noted Urban Space Management.

In 2006, Southern California Architect Peter DeMaria designed the first two story shipping container home in the U.S. as an approved structural system under the strict guidelines of the nationally recognized Uniform Building Code (UBC). This home was the Redondo Beach House and it inspired the creation of Logical Homes, a cargo container based pre-fabricated home company.

They also have a fine use for low income housing. As an MBA student, Brian McCarthy saw many poor neighborhoods in Ciudad Juárez, Mexico. He has since developed prototypes of shipping container housing for typical maquiladora workers in Mexico. And now, people can buy homes for as low as $8,000.

Containers are also used in disaster relief. In 2011, an earthquake in Christchurch, New Zealand devastated the city’s central business district. The Cashel Mall reopened in a series of shipping containers within months.

The use of rudimentary containers to ship cargo began in the late 17th century. By the 1950s, the U.S. military standardized their design, building strong, uniform, theft-resistant, stackable shipping containers that were easy to load and unload by truck, rail and ship, and easy to store. Now, containers are not just for shipping anymore. In the future, the cargo container will contribute to construction in a variety of ways.

We’re here to help you with your real estate needs. Please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – jodi@jodisummers.com or 310.392.1211, and let us move forward together.