E-Commerce Is Driving Industrial Development to Record Highs
November 10, 2017 | Patricia Kirk | National Real Estate Investor
U.S. industrial real estate development hitan all-time high in 2017, with more than 208 million sq. ft. completed so far, and another 277 million sq. ft. currently under construction, according to research firm CoStar. Real estate services firm JLL is seeing similar trends, according to Mason Mularoni, JLL senior research analyst. Last year, a total of about 164 million sq. ft. of new industrial space was completed in JLL’s calculations.
Robust development activity is partly due to the industrial vacancy averaging just 5.2 percent for the second consecutive quarter, Mularono notes. He attributes the trend to increasing demand from e-commerce tenants.
E-commerce sales have increased by 16 percent year-over-year and now account for 9 percent of all U.S. retail sales. E-commerce also accounts for about 12 percent of industrial leasing activity and an additional 22 to 30 percent of indirect leasing through closely tied logistics, distribution and 3PL channels.