E-Commerce Demand Shifting Construction from Retail to Logistics, Boosts Absorption to Near-Record Levels
More Investors Pursue Higher Yields by Backing New Development as Industrial Real Estate Expansion Rolls On
November 3, 2016 | By Randyl Drummer | CoStar
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The appetite of internet-based sellers and other retailers for newly built logistics properties drove net absorption of industrial real estate to its highest total since early 2000 during the third quarter.
In addition, e-commerce demand appears to be taking a bite out of the retail construction and shifting it to the logisitics sector. The 53 million square feet of new logistics space delivered by developers in the third quarter was the second-highest quarter on record.
The large amount of new supply kept in balance with strong demand as logistics tenants absorbed 56 million square feet of warehouse and distribution buildings, according to CoStar’s recent Third Quarter 2016 Industrial Real Estate Review and Forecast.
