Thomas Bisacquino, CEO of NAIOP

PHOENIX—Over the past three years, online retail has grown 18 percent, compared to only 1.3 percent for brick-and-mortar transactions, and retailers and commercial real estate analysts have taken notice. To discuss the changes and the way the retail sector can adapt, NAIOP is hosting E.CON, the first ever national conference on e-commerce for commercial real estate, on March 27 and 28 at the Hyatt Regency Phoenix. recently spoke with Thomas Bisacquino, CEO of NAIOP, to learn more about how e-commerce is affecting change in the commercial real estate market. What are the major challenges we can expect this year regarding e-commerce and the demand for space?

Thomas Bisacquino:There’s been a seismic shift in how people purchase goods and where they purchase them. It’s happening at the speed of light. You’re seeing exponential growth in sales year on year for e-commerce so that puts a tremendous demand on space for e-commerce. Goods have typically gone from a distribution center to a retailer, but now many goods are shipping from a fulfillment center directly to the consumer, bypassing the retail store altogether. Brick and mortar facilities are becoming more like showrooms. These fulfillment facilities are getting bigger and bigger. You used to have half a million square feet and now it’s a million-plus. So it’s a high demand for that product. You know the old adage, location location location? They have to be located in an area that works. We’re looking 18 months out and we see a high demand and that’s good news. How has e-commerce affected industrial thus far in the transition period? Is there a little more history you can offer?

Bisacquino: Like any transition, you’re building the plane as you’re flying it. There’s been a huge demand for efficiency. When you think about a traditional distribution center, you didn’t need a bunch a people operating them because you’re taking the goods by the truckload and shipping them to the stores. It’s now the individual package that’s being dealt with. So now you have a big facility, but there are different needs. You have now a round-the-clock facility and the challenge that we’re facing is going from traditional distribution to needing a huge track of land with a lot of parking to accommodate all the employees. And transportation is still huge—truck, rail—it’s still huge. The transition is happening very quickly and it’s exciting to see it. What can attendees expect from NAIOP’s E-Commerce Conference coming up in Phoenix?

Bisacquino: We’ll be covering the whole waterfront in terms of e-commerce. We have a panel on end users perspective on site selection; technology; what to and what not to do; and a behind-the-scenes tour of Macy’s Direct-to-Consumer Distribution Center. If you’re an investor, a broker, there’s going to be the whole gamut of e-commerce information you can use.

Registration for the conference is available online at through Wednesday, March 26, or onsite at the Hyatt Regency Phoenix beginning on Thursday.