By now we’re all tired of the refrain that “COVID changed everything,” but the fact remains it has. Especially in the building industry, the macroeconomic trends heavily influenced by the pandemic have not only changed the existing landscape but have also created ripples that will be felt for years to come.
And while some of the changes are in fact unexpected, in many cases existing trends were amplified and accelerated. For developers, the largest of these is a massive need for more warehouses and distribution spaces. According to data from JLL Real Estate, a global services firm that specializes in buying and selling commercial properties:
- 96% of existing industrial space in the United States is currently in use.
- The leasing volume is triple in many cases to what’s being built.
- 190 million sq. ft. of retail space was under construction in 2020, and 43% of those being built were pre-leased before construction was completed.
What does this mean for builders, developers, and the business community at large?
- It means a shift in local economies as brick-and-mortar retail continues to crumble and jobs are increasingly concentrated in logistics and solutions to supply chain challenges;
- a large increase in truck and commercial vehicle traffic in areas that may not have been designed or accustomed to handle it; and
- OPPORTUNITY for builders looking to find a niche in the wider-shifting economy as industry priorities change gears.
Despite the glaring need for more housing in the United States amid consistently high home prices and skyrocketing rents, builders and developers would be wise to consider this vertical frontier and how to market themselves as competent collaborators in the supply chain sector.
Reference: https://www.cnbc.com/2021/11/29/online-shopping-black-friday-cyber-monday-warehouses.html