Does the USA have enough warehouse space? No, it doesn’t. In the next five to ten years you can expect many more warehouses to be built around the country to handle the ever-growing world of e-commerce. Machines, buildings, and people will be needed to handle all sorts of boxes and orders.
If 2020 taught us anything, it’s that the coronavirus pandemic shifted people’s attitudes about staying home versus going out… and more and more people have made the transition to online shopping and delivery than ever before. Indeed, if you visit malls, you’ll notice many are hurting for tenants because retailers are abandoning brick-and-mortar stores in favor of their lucrative online business.
Demand Could Reach an Extra 1 Billion Square Feet in the Next 5 Years
According to a new report from JLL (a commercial real estate services firm), demand for industrial real estate could reach an additional 1 billion square feet by 2025. JLL reported recently that before the Covid-19 crisis, about 35% of its industrial leasing activity was related to e-commerce. Today? It’s about 50%.
E-commerce is trying to keep up with increasing consumer demand. They have orders to fulfill but don’t necessarily have the warehouse space they want or need… yet. In the past, if a lease deal was signed, it might take several months before a company would move into their space, whereas nowadays it’s often done in 30 days or less.
Did you know that JLL thinks the USA needs another 100 million square feet of cold-storage facilities to keep up with consumer demand?
Meanwhile, the firm eMarketer is predicting e-commerce sales in the USA to go from 14.5% of total retail sales (today) to 18.1% of all retail sales by 2024. Not long now, and we’re looking at online sales surpassing $1 trillion for the first time!
When it comes to the commercial real estate industry, it’s industrial real estate that’s “hot.” Basically, the USA needs more warehouse space… it’s more in-demand than space for offices, retail or hotels. You might be seeing current spaces, such as malls, converted into warehouses in the near future.
If you’re looking for a reliable warehousing partner in North America, learn how Affiliated Warehouse Companies can help.