Real Estate

Robust Industrial Real Estate Market From Ecommerce Growth

The recent Covid-19 pandemic and shelter-in-place policies are accelerating many political, cultural, and economic trends. This is particularly true in the industrial real estate market. Spurred by an e-commerce boom, the need for functional warehouse space continues to accelerate. Some analysts predict that the warehouse industry may require an additional 1 billion square feet by 2025.

Historically Strong Industrial Real Estate Market

The recently expanded need for industrial real estate comes upon already strong growth in the warehouse and distribution sector. Before the 2020 Covid19 outbreak warehouse demand was at historic highs. Since 2011, industrial rent has continued to increase as vacancy rates have fallen to all-time lows. As a result, industrial real estate properties have provided attractive, stable, long-term returns to investors. Due to healthy fundamentals and e-commerce’s growth potential, industrial real estate investments continue to be a safe haven during the troubled economic times.

 

E-COMMERCE INDUSTRY BOOM CONTINUES TO ACCELERATE

By the end of 2019, e-commerce annual sales hit $602 billion in the United States. However, Covid-19 is adding fuel to the fire, and rapidly increasing e-commerce growth. According to an Adobe report released in June, total spending online in May hit $82.5 billion up 77% year-over-year. The online buying habits increased this may to levels only seen typically during the holiday season.

As a consequence, the recent increase has quadrupled the pace that consumers are using e-commerce platforms. Therefore, e-commerce titans are rushing to improve their capacity to provide goods, and as a result, expanding their real estate footprint.

WHAT DOES THIS MEAN FOR OCCUPIERS?

Despite the economic slowdown in many sectors of the economy, the market for warehouse and distribution space is on fire! The demand for spaces with significant clear height and ready-made for e-commerce logistics is historically strong. Although, for some tenants looking at older more functionally obsolete industrial properties tenants may have more cushion. Still, for tenants and purchasers looking to enter the market it is important to understand your business’ needs and be prepared to act quickly.

Gordon Lamphere J.D.

Gordon is a licensed Illinois & Wisconsin Real Estate Broker, who manages the commercial sales and leasing team. Gordon also leads Van Vlissingen and Co’s media marketing team. He is an honors graduate of St. Mary’s College of Maryland and holds a Juris Doctorate from Tulane University Law School.

Recent Posts

Ares Management Doubles Down on Aurora

In a market where headlines focus on rising vacancy and softened leasing momentum, Ares Management’s…

2 days ago

America’s Construction Crisis: Why Projects Go Over Budget — Barry LePatner on RFP 65

In this episode of The Real Finds Podcast, host Gordon Lamphere sits down with Barry…

5 days ago

Is There A Massive Shadow Supply In Chicago’s Industrial Market

Shadow Supply in Chicago’s Industrial Market: What Investors and Occupiers Should Be Watching Closely The…

6 days ago

Is Bradford Allen Betting on the Bears or on Arlington Heights?

Betting on the Bears or Arlington Heights? In early June 2025, Bradford Allen made headlines…

6 days ago

Building Class A Offices Right: Lessons from Soho’s Best

What does it take to build office space that tenants don’t just tolerate, but love?…

7 days ago

Key Aurora Developments in 2025

Aurora, Illinois — the second-largest city in the state, continues to emerge as a vital…

7 days ago
We're Ready To Help
X We're Ready To Help