Latest Trends in the Industrial Real Estate Sector Here to Stay

The United States will need one billion square feet of industrial space over the next five years to keep up with e-commerce demand — one billion! Throughout the COVID-19 pandemic, much attention has been paid to the future of office, but the industrial market is experiencing a similar tectonic shift.

Prior to the onset of the coronavirus, the increase in online sales was driving growth in the industrial real estate sector. JLL found that nearly 35 percent of all industrial leasing was attributed to e-commerce pre-pandemic. After March 2020, as online sales experienced an explosion in growth, demand for distribution space skyrocketed, accounting for the majority of all industrial leasing in 2020 — Amazon alone represented 55 percent of total U.S. industrial absorption. The result? A flood of investment dollars into the industrial real estate sector — the infrastructure (i.e., warehouses) needed to build out the same-day/next-day e-commerce network is not dissimilar to the railroad industry in the late 19th century.

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