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E-Commerce Could Bump Up Warehouse Demand by 1B SF
The COVID-19 pandemic and the shelter-in-place policies that ensued have accelerated e-commerce growth and the need for warehouse space nationally, says JLL. The firm predicts that growth in e-commerce sales could demand for industrial real estate to an additional one billion square feet in the next five years.
According to Digital Commerce 360, e-commerce sales hit $602 billion in the U.S. at the end of 2019. Combined with the new projections, JLL predicts total e-commerce sales could hit $1.5 trillion by 2025.
Before the pandemic, JLL attributed as much as 35% of its industrial leasing to e-commerce. Today, with expectations for e-commerce to grow 20% in 2020 alone, JLL is seeing as much as 50% of its leasing activity already attributed to related operations this year.
“Since 2011, industrial rent growth has been positive and vacancy rates have been at historic lows providing attractive, stable, long-term returns to investors,” said Craig Meyer, president, JLL Americas Industrial. “These solid fundamentals and the fact that e-commerce still has a long runway for growth makes industrial real estate the darling of the commercial real estate industry.”
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