E-Commerce Speeds Industrial Real Estate Transformation

Warehousing is expected to grow by double digits while facilities add more technology.

The North American industrial real estate sector is undergoing a rapid transformation driven by e-commerce growth, and is forecast to grow by double digits throughout 2019 and beyond, according to the global real estate firm Cushman & Wakefield.

Over the next few years, several broad trends will influence the market, the company observes. One of these is warehouses that will get taller and be brimming with state-of-the-art technology. “Tenants will begin to test and fill multi-story warehouses, with the industry learning a tremendous amount about their functional abilities and the rent premium tenants that occupy them are willing to pay,” C&W says.

The company forecasts North American industrial real estate absorption will register a healthy 495 million square feet (msf) in 2019-2020, with 550 msf of new product delivered by year-end 2020. In the U.S., net absorption will eclipse 245 msf in 2019 with demand expected to track in the low-to-mid 200 msf range in 2020.