E-commerce and Online Retailing Drive the Demand for Warehouse Space

Written by Economic Development Jobs on August 15, 2016. Posted in Determining warehouse space needs, Warehouse for rent in orlando, Warehouse in tampa fl

Finding a warehouse to rent

Warehouses have long been symbols of modern industrial and commercial activity. As this moves into a new phase with e-commerce and online retailers, warehouses remain essential to commercial activity. Retailers now have the option of renting a warehouse instead of building their own. Commercial real estate development firms take the responsibility of construction and maintenance, leasing commercial property for offices spaces, retail and warehousing and distribution.

Rising demand for warehouse space
At the present time, the storage and warehouse leasing industry in the U.S. is estimated to be worth $26 billion, and growing. In 2014, commercial real estate development absorbed an additional 70.2 million square feet of office space. This was the biggest expansion since 2006.
The demand for commercial leases is projected to grow. Over the next five years, it is expected that 25 million square meters of additional space will be needed by online and offline retailers.
To meet the growing demand, commercial real estate development firms are accordingly increasing the amount of warehouse space available for lease. More than half or around 62% of this increase is actually speculative: 59 million square feet of warehouse space was under construction by the end of the third quarter in 2013 without any tenants already signed on.

E-commerce needs for warehousing
Commercial real estate development firms essentially track economic trends and one of these has been the increasing demand for warehouse space. Regardless of economic fluctuations, occupied distribution and warehouse space has increased steadily by 86.2% since 2000. The average annual growth rate in the demand for storage space is a steady 7%.
As e-commerce continues to grow, it offers opportunities for commercial real estate development firms in building and developing warehouse and distribution space. Over the next five years, e-commerce is expected to grow at a compounded annual average rate of 10%. In fact, since 1990, larger warehouses, at least 100,000 square feet or more in size, have never posted negative absorption in a single quarter.

Warehousing locations provide jobs
The warehousing industry provides employment where it’s needed. The storage and warehousing industry employs around 166,907 men and women in the U.S. Warehouses are typically located near transportation and distribution hubs. These are primarily in urban areas, where sea, land and air transportation meet.
The location also provides the workforce. Warehouses tend to be located near population centers as well. For example, Lakeland FL has a highly strategic location from a commercial point of view. It is in the center of the state, and more than 8 million people live within a hundred mile radius. This makes it an ideal location for commercial warehousing.

Commercial real estate development firms offer retailers greater flexibility in renting or leasing commercial property. This saves them the whole responsibility of owning, building, and managing property, and allows them to concentrate on commercial activity instead. More than two hundred years after the first industrial revolution, warehousing remains central to modern economic activity.

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