March 29, 2017
Recent research from JLL noted that annual e-commerce sales accounted for nearly $2 trillion globally in 2016, and is projected to reach $4 trillion by 2020. According to JLL, online sales represent roughly 9% of retail spending, and would reach 15% by 2020.
There’s no question, e-commerce is emerging as a disruptive force within the retail sector. As a result, retailers, restaurants, malls and even industrial owners in California are scrambling to keep up with explosive consumer demand to receive goods immediately.
Increased volume is also driving tightening conditions in industrial markets across the state, especially for distribution warehouses that complete “last mile” connections to consumers. The Bay Area’s lease rates for facilities in this segment rose 8.4% in the past two years, and by nearly 44% since the last market trough in 2011.
The impact is likely to create challenges for occupiers, while further contributing to favorable landlord conditions.
For comments, questions or concerns, please contact Dennis Kaiser