Over the last several months, this blog series has outlined the impact of COVID-19 on various property types across the country. As you might expect, it was difficult to find reasons for optimism for some industries in such an uncertain time. Luckily, that’s all behind us! In this blog, we discuss the shining star of 2020 commercial real estate: Warehouses.
Warehouses and COVID-19
Our optimism for warehousing stems from the ecommerce boom that has been taking place for the last ten years. The year 2020 has only strengthened this optimism. In just the first quarter of the year, industrial leasing reached a three year high in the United States – and that was at only the beginning of the pandemic. Since then, the industry has continued to grow and warehouse jobs have topped pre-COVID levels. Purchasing items online is the easiest and safest way to shop, and both of those factors mean a lot to consumers. The surge in popularity of online shopping created an immediate need for increased warehousing infrastructure and capacity, and we predict that the need won’t be going away any time soon.
Forecasting the Future for Warehouses
Even after the dust of the pandemic settles, we shouldn’t expect ecommerce to suffer as a result. The convenience, speed and safety of online shopping are all things that consumers have grown to appreciate over the year, and we don’t expect consumers to readily abandon this form of shopping at the first opportunity.
We also expect the pandemic to reshape the entire landscape of warehouses. After we witnessed demand surges for several products throughout 2020, we now have a better idea of how to avoid them in the future. Experts are predicting that businesses will now try to build up a greater stock of essentials close to their customers to guarantee fast delivery times even in the face of disaster. As supply chains become more regionalized, the demand for warehousing space will only increase.
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