National CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
Faster Shipping Drives Retailer Demand for Industrial
This holiday season, retailers will continue to rely on modern distribution and fulfillment centers to meet consumer demand, particularly with the growing two-day, one-day and same-day shipping requirements, says Avison Young.
The hot consumer picks for 2018—including electronics, toys, apparel, computers and video games—will likely be tracked, sorted and shipped from industrial hubs in the Inland Empire, Dallas, Chicago, Northern New Jersey, Atlanta and Miami, among other markets.
“E-commerce growth has been a significant driver of the industrial sector for several years, as retailers push to add strategically-located distribution, fulfillment and warehouse facilities,” said Avison Young’s Chris Tecu (pictured). “Despite record construction activity in recent years, developers can’t build fast enough to keep up with the demand in some markets.”
Citing CoStar data, Avison Young says e-commerce will account for approximately 105 million square feet of industrial space absorbed by the end of 2018. That’s 50% of the projected total of 210 million square feet.
An important component of the online sales push in recent years has been last-mile facilities, used to deliver goods quickly to a large population base. As this market segment has gained momentum, inventory is low in many markets and developers are scrambling to find buildings or land sites for development.
“We are finding e-commerce companies using high-level analytics when selecting their last mile distribution centers, taking into account delivery routes, labor pool, and customer locations,” said Brian Hilger at Avison Young.
For comments, questions or concerns, please contact Paul Bubny
- ◦Development
- ◦Lease
