Expect the demand for warehouse space to only continue to rise in 2018, thanks to – no surprise – the still-growing popularity of online sales.
LaSalle Investment Management recently released its outlook for 2018 commercial real estate in North America. The report contains plenty of good news for the industrial sector, with LaSalle saying that the basic fundamentals of CRE remain strong.
This is particularly evident in the industrial market, where e-commerce sales are forcing companies to open or settle in more warehouses across the United States. Demand for warehouse space is especially strong in major population centers. In the Midwest, this means that key markets such as Chicago, Minneapolis, St. Louis, Indianapolis and Louisville will continue to see strong demand from users for warehouse space.
LaSalle’s report isn’t the only recent predicting growth in the warehouse sector. A recent report from Cushman & Wakefield predicted rather explosive growth in this sector. In its North Amerian Industrial Forecast Report, Cushman predicted that from 2017 through 2019, that the industrial market will absorb 655 million square feet of space.
If that number sounds impressive, it’s because it is. This would be the second-best stretch that Cushman & Wakefield recorded, behind only the 833 million square feet of industrial space absorbed from 2014 through 2016.
E-commerce, of course, is one of the main factors behind Cushman’s optimistic numbers. According to the report, e-commerce accounted for 20 percent of all new warehouse space. In 2013, e-commerce was behind just 5 percent of warehouse leases in North America.
And as retail giants like Amazon continue to surge? Expect e-commerce’s impact on warehouse demand to only continue to soar.
