With online sales anticipated to reach $370 billion by 2017, up from $231 billion in 2013, the industrial real estate market will be a main beneficiary, says Cushman & Wakefield’s recent U.S. Market Overview.
Increased sales translate into greater demand for logistics facilities, tailored to the needs of e-commerce. And while location has long been the most significant success factor in retail, e-commerce is redefining the meaning of “ideal location” for a fulfillment center. The evolution of e-commerce from a two- to three-day delivery window to a same-day fulfillment model is driving the new design requirements and the clustering of big-box sites near population centers.
Cushman & Wakefield is a Premier sponsor of I.CON ’15: The Industrial Conference, and NAIOP sat down with James Carpenter, executive director with Cushman & Wakefield in Chicago, to talk all about how e-commerce is pushing the industrial segment of the market.
NAIOP: Why is industrial keeping a stronghold as the hottest property type and what’s driving the demand?
Carpenter: A multitude of factors are driving industrial demand. The most notable is clearly e-commerce, but the continued recovery of the housing market is also feeding it.
NAIOP: Name three things industrial real estate can do to keep their projects/companies/service providers can do to keep competitive.
Carpenter: Service providers must be able to cohesively deliver a broad range of services in a consistent manner across markets to compete for the best assignments with the best clients. So, in a nutshell: (1) be cohesive (2) be consistent (3) have broad market coverage.
NAIOP: What factor is most changing industrial? How must companies adapt?
Carpenter: E-commerce is clearly the most significant influence on the demand side of the business. In order to stay in front of this trend, companies must understand the whole e-commerce supply chain – from large sorting and distribution facilities down to high throughput facilities in urban settings – and understand what portion of that supply chain, and which type of facility, is most important to a prospective customer.
NAIOP: Why is NAIOP’s I.CON sponsorship investment valuable to your company?
Carpenter: It’s the best industrial-only networking event in the business, bar none, and the content is great.
Cushman & Wakefield is the world’s largest privately-held commercial real estate services firm with services in five primary disciplines: Transaction Services, Capital Markets, Corporate Occupier & Investor Services, Consulting Services, and Valuation & Advisory.
Meet Cushman & Wakefield at I.CON ’15, June 10-11 in Long Beach, California. See the conference website for details on who attends, hot sessions, and project tours.
Kathryn Hamilton is Vice President for Marketing and Communications at NAIOP Corporate.