E-Com Demand Will Filter Down

CHICAGO—As e-commerce rises in popularity, and distribution spaces mushroom in many places across the country in response, investors and owners of commercial real estate have had to consider how all this will affect traditional brick-and-mortar retail. Erik Foster, an Avison Young principal and author of a new study, “E-Commerce Fueling Demand for Industrial Distribution Space,” tells GlobeSt.com that he “thinks when you see traditional retail reduce their square footage and reduce their inventory,” that’s a possible sign that that e-commerce has already cut into traditional retail.

As noted in yesterday’s story, Foster pointed out that “since 2000, the amount of occupied distribution space has increased by 86.2%, from 459.3-million-square-feet to 855.1-million-square-feet at the end of Q1 of 2013, according to CoStar,” for an annual growth rate of 7%. Furthermore, during the same period, occupied retail space only grew at an average annual basis of 0.9%.