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E-Commerce Drives Industrial Demand, Price Appreciation at Surprising Magnitude

Research by Green Street Advisors shows industrial real estate values have appreciated by 18% in the past two years. The Newport Beach, CA-based research firm’s Commercial Property Price Index revealed the surprising magnitude of increased demand from e-commerce.

Green Street analyst Eric Frankel says demand increases from e-commerce remains in the neighborhood of 30 to 40%. The amount of warehouse space required to deliver goods via e-commerce is a lot greater than standard brick-and-mortar. A review of Amazon and Walmart’s operations reveals that e-commerce sales require at least 2.25x more distribution space than brick-and-mortar retail.

The strong pace of market rent growth is expected to continue, though Green Street believes the healthy equilibrium that exists between development and demand will hold over the next several years. Frankel says, “demand has been so good that there has been no problem with supply being absorbed,” plus oversupply has been prevented since, “it is more difficult and costly to add new supply than it has ever been.”

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Read more at Green Street AdvisorsConnect With Green Street Advisors’ Frankel

About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.

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