It will be interesting to see how the strategies of “pure play” online retailers change, writes Chris Roach.

DALLAS—Reports about the effects of e-commerce on commercial real estate usually point to decreased demand for traditional retail space and increased demand for warehouse space near major population centers. As of January, industrial vacancy rates nationwide had dropped for the 27th consecutive quarter. A sizable percentage of new warehouse space is being built on speculation. Industrial real estate has emerged as the preferred asset type among domestic and foreign investors.

Investors and developers clearly have faith in the industrial sector. With e-commerce expected to see double-digit growth and drive demand through 2020, their confidence is well-placed. But the headlines about e-commerce and industrial real estate don't tell the whole story.

E-commerce needs—including two-day, next-day and even same-day delivery—affect the location and size of industrial properties. As opposed to centrally located distribution centers, e-fulfillment centers need to be close to major population centers and the end consumer. Therefore, all eyes are focused on industrial demand in top-tier markets like Los Angeles, Chicago, Dallas and Central New Jersey. But major e-commerce deals are also spiking in secondary and Midwest markets, including Pennsylvania's Lehigh Valley, St. Louis, Indianapolis and Cincinnati. Net absorption in these smaller markets is, in fact, growing at a faster clip.