Industrial Has Its Day, But What Does the Future Hold?

It will be interesting to see how the strategies of “pure play” online retailers change, writes Chris Roach.

DALLAS—Reports about the effects of e-commerce on commercial real estate usually point to decreased demand for traditional retail space and increased demand for warehouse space near major population centers. As of January, industrial vacancy rates nationwide had dropped for the 27th consecutive quarter. A sizable percentage of new warehouse space is being built on speculation. Industrial real estate has emerged as the preferred asset type among domestic and foreign investors.

Investors and developers clearly have faith in the industrial sector. With e-commerce expected to see double-digit growth and drive demand through 2020, their confidence is well-placed. But the headlines about e-commerce and industrial real estate don’t tell the whole story.