Real Estate

Robust Industrial Real Estate Market From Ecommerce Growth

The recent Covid-19 pandemic and shelter-in-place policies are accelerating many political, cultural, and economic trends. This is particularly true in the industrial real estate market. Spurred by an e-commerce boom, the need for functional warehouse space continues to accelerate. Some analysts predict that the warehouse industry may require an additional 1 billion square feet by 2025.

Historically Strong Industrial Real Estate Market

The recently expanded need for industrial real estate comes upon already strong growth in the warehouse and distribution sector. Before the 2020 Covid19 outbreak warehouse demand was at historic highs. Since 2011, industrial rent has continued to increase as vacancy rates have fallen to all-time lows. As a result, industrial real estate properties have provided attractive, stable, long-term returns to investors. Due to healthy fundamentals and e-commerce’s growth potential, industrial real estate investments continue to be a safe haven during the troubled economic times.

 

E-COMMERCE INDUSTRY BOOM CONTINUES TO ACCELERATE

By the end of 2019, e-commerce annual sales hit $602 billion in the United States. However, Covid-19 is adding fuel to the fire, and rapidly increasing e-commerce growth. According to an Adobe report released in June, total spending online in May hit $82.5 billion up 77% year-over-year. The online buying habits increased this may to levels only seen typically during the holiday season.

As a consequence, the recent increase has quadrupled the pace that consumers are using e-commerce platforms. Therefore, e-commerce titans are rushing to improve their capacity to provide goods, and as a result, expanding their real estate footprint.

WHAT DOES THIS MEAN FOR OCCUPIERS?

Despite the economic slowdown in many sectors of the economy, the market for warehouse and distribution space is on fire! The demand for spaces with significant clear height and ready-made for e-commerce logistics is historically strong. Although, for some tenants looking at older more functionally obsolete industrial properties tenants may have more cushion. Still, for tenants and purchasers looking to enter the market it is important to understand your business’ needs and be prepared to act quickly.

Gordon Lamphere J.D.

Gordon Lamphere, J.D. is Vice President of Sales & Leasing at Van Vlissingen and Co., advising owners, investors, tenants, and corporate occupiers on industrial, office, retail, and land transactions across Chicagoland, Northern Illinois, and Southern Wisconsin. Ranked Chicagoland's #1 commercial real estate broker for 2026 by multiple industry publications, with transaction activity independently verified through Crexi, Gordon and his team close 100+ transactions annually. He hosts The Real Finds Podcast, Chicagoland's leading commercial real estate podcast, and holds a J.D. from Tulane University Law School.

Recent Posts

Why Institutional Capital Is Wrong About Workforce Housing With Jon Siegel – RFP 108

Why Institutional Capital Is Wrong About Workforce Housing With Jon Siegel - RFP 108 Most…

1 week ago

Why Family Real Estate Portfolios Collapse With Dr. Carey Chronis – RFP 107

Why Family Real Estate Portfolios Collapse With Dr. Carey Chronis - RFP 107 Commercial real…

2 weeks ago

Why Smart Investors Are Buying Dirt With Ron Rohde – RFP 106

Why Industrial Outdoor Storage Is the Asset Class Big Capital Cannot Easily Buy: Lessons From…

3 weeks ago

Why Blackstone Is Pouring Billions Into Net Leases With Sean Hostert – RFP 105

Net Lease Decoded: Why the Quietest Corner of Commercial Real Estate Is Drawing the Loudest…

1 month ago

Inference AI Is Rewriting The Commercial Real Estate Site Selection Playbook

How Inference and AI Could Rewrite the Entire Site Selection Playbook for Commercial Real Estate…

1 month ago

Sidley Austin’s 725 Randolph Signals More Office Trouble?

Sidley Austin's 725 Randolph Move Is a Warning Shot for Chicago's Office Market When the…

1 month ago
We're Ready To Help
X We're Ready To Help