Warehouses in the sky: Multi-level projects ramp up

With urban industrial space limited, developers bet on vertical projects

There was nowhere to go but up.

In 2016, Dov Hertz, the No. 2 person at Gary Barnett’s Extell Development, made a late-career leap and started his own shop. He decided to focus on industrial, though as a New York City developer he had no experience with it: New Jersey’s sprawling industrial parks, comprising some 800 million square feet, had long served as the city’s warehouses.

But there was talk about shortening delivery times, and the traffic-choked truck routes across the Hudson River weren’t getting any less crowded.

“The handwriting on the wall was that industrial tenants were going to have to come into the boroughs,” Hertz said.

Seemingly overnight, industrial tenants needed sophisticated operations in the city, but prospects were few. Less than 3 percent of it is zoned for industrial use, and the little industrial space it does have isn’t state-of-the-art. Former manufacturing hubs like Dumbo had long ago become pricey residential enclaves.

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