The next big industrial warehouse might find itself on top of a former golf course. Or in an empty office building. Maybe in a vacated shopping mall (like Amazon’s Baton Rouge plans).
The COVID-19 pandemic has accelerated e-commerce sales globally, with digital sales driving a larger portion of retailers’ and grocers’ businesses. That has sparked a race for warehouse space and caused companies to seek creative commercial real estate alternatives as they strive to fulfill online orders and avoid delivery delays, CNBC reports.
Demand for industrial, big-box facilities—warehouses or distribution centers of 200,000 square feet or more—hit a record in North America last year, and Louisiana was no outlier as Business Report details in this feature from last year. According to commercial real estate services firm CBRE, this type of space was the strongest performer among all industrial real estate. Transactions for those spaces totaled 349.3 million square feet in 2020 across the top 22 markets, a nearly 25% jump from 2019, according to CBRE.
The pace of e-commerce growth will likely slow in 2021, as people feel safe shopping at stores again. But real estate executives say industrial space will remain a competitive market.
“We’re really just seeing the tip of the iceberg as far as demand and growth of e-commerce,” says Mindy Lissner, a CBRE executive vice president.
With a hot market and supply of industrial space running thin, businesses and their brokers are having to get creative.
How about an old golf course? Amazon recently found a shuttered 18 holes in the town of Clay, New York, to build a $350 million distribution center. It’s also plotting a fulfillment center on top of a portion of a former golf course in Alcoa, Tennessee. Read the full story.