E-Commerce Driving Demand for Commercial Real Estate

With e-commerce fueling a gross domestic product increase of 4.1% in the second quarter of 2018, a real estate analyst predicts that the need for 1.62 million square feet of additional warehouse space every week.

Last week, the Bureau of Economic Analysis reported a growth rate of 4.1% in the second quarter of 2018, almost double the 2.2% rate in the first quarter - and the strongest figures since the third quarter of 2014.

Duke Realty Corp. (DRE) released a report that showed for every billion increase in e-commerce sales, another 1 million square feet of fulfillment space is needed.

Through 2021, Duke estimates another 339 million square feet of industrial space will be needed.

"That means 1.62 million square feet of additional warehouse space for e-commerce will be needed every week," notes Augusto Beato, CEO of Portland SEO. "That size is equivalent to 28 football fields."

E-commerce sites hoping to boost their sales have been ​contacting Portland SEO through this link.

With such strong GDP growth, fueled by powerful e-commerce catalysts, as well as the spigot of capital flowing into corporate machinery and equipment, it’s boom time for logistics landlords.

Last week, Morningstar analysts assessed the industrial sector in “an expansionary mode,” well-positioned, reporting, “Trends driving strong demand for warehouse space—primarily the growth of e-commerce and an expanding manufacturing sector—continue to drive low availability of space and encourage developers to build more.”