Industrial developer Jose Hernandez-Solaun of The Easton Group has seen Amazon spur the rise of e-commerce over the last few years. But now, he sees the coronavirus pandemic rapidly ramping up that growth — putting it on steroids.
“What we are finding now is the coronavirus effect,” said Hernandez-Solaun. “If the Amazon effect was strength training, this was what you get on performance-enhancing drugs.”
Hernandez-Solaun and other South Florida industrial brokers and developers say the sector could benefit in the long-term from many of the behavioral changes spurred by the crisis. Consumers, increasingly from older generations, will shift more of their spending to e-commerce. More manufacturers will come to the Americas from China. And after experiencing inventory shortages, more warehouses will be needed, experts say.
New numbers have confirmed that 2019 was a monumental year for industrial real estate, with total volume soaring to a record high of $102B, JLL reports.
That propulsion is expected to carry into 2020. JLL predicts industrial volumes in 2020 will continue to boom, with large-scale portfolio deal flows that are slated to finish during the first two quarters of 2020.
Ask any industrial broker about the most important feature to industrial tenants looking for a new facility and they’ll say “location.”
After that, it’s probably going to be clear height, with at least 32 feet, but preferably 36 or 40 feet, especially for large users (those taking 500 to 1,000 sq. ft. or more).
But according to Blaine Kelley, Atlanta-based senior vice president of the global supply chain practice with real estate services firm CBRE, tenants will trade off all other physical features for proximity to customers, labor and suppliers.