E-Com Fuels Demand for Distribution Space

CHICAGO-E-commerce has excited a great deal of interest among commercial real estate investors in the past few years. Unlike most sectors of the economy, which mostly show a slow, steady growth, e-commerce has been almost explosive, and will create investment opportunities with distribution centers in key markets across the country, according to a new report by Erik Foster, an Avison Young principal based in Chicago, and practice leader of the firm’s Industrial Capital Markets Group.

Online sales pushed past $225 billion in 2012, an increase of 15.8%, according to data from the U.S. Census Bureau, Foster points out, and adds that the “consumer research firm Forrester is projecting online retail sales will reach $370 billion by 2017,” or a 10% annual growth rate, “and continue to outpace the growth of physical retail stores.” The sector has seen more than 151-million-square-feet of new development just since 2010. In 2012 alone, Amazon, one of the biggest players in the sector, opened nine more distribution spaces in North America totaling 8.45-million-square-feet. The company now has more than 33-million-square-feet of distribution space.