Real Estate Supporting the Global Supply Chain.
The Growth of E-commerce
Consumer shopping patterns are changing. For the vast majority of the global population, online shopping has become a part of everyday shopping habits. Shoppers are no longer walking into traditional brick-and-mortar stores to purchase goods, and now prefer to do their shopping from their fingertips on their mobile phone or computer. With the explosion of e-commerce and online shopping in the 21st century, industrial real estate is well positioned to see growth for years to come. As of 2024, US e-commerce represents roughly $1 trillion in total revenue. That figure is expected to grow to $2 trillion by year 2029 as e-commerce is further adopted. Many retailers have been forced to accelerate the need for inventory management and direct to consumer storage facilities, creating new and growing opportunities in the industrial real estate sector.
Multi-Tenant Industrial (Shallow Bay)
One of the size segments within industrial real estate that has shown the most resilience , but often overlooked, is small/mid bay buildings. Often referred to as “multi-tenant” or “shallow-bay” buildings, these properties are typically less than 200,000 SF and broken up into multiple smaller tenant suites ranging from 10,000 - 1000,000 SF.
While developers have been focusing on larger bulk distribution building projects in recent years; the larger size segments have become extremely saturated nationally.
All the while, smaller multi-tenant facilities have remained healthy and steadfast from a tenant demand perspective. With the inability to add new supply due to high cost of construction, and a robust base of tenant demand, shallow-bay buildings present some of the strongest fundamentals for long term growth and asset appreciation in the entire commercial real estate sector.
Industrial Outdoor Storage (IOS)
IOS properties are industrial spaces typically featuring a significant outdoor area, primarily used for storage, heavy industry, or vehicle and truck parking. These properties may have minimal or no building structures, while some include facilities for equipment servicing, warehousing, or a small office component for business or administrative purposes. The effectiveness of outdoor storage areas is more dependent on the location and land improvements than on the buildings themselves. These outdoor spaces are ideally suited for storing vehicles, equipment, bulk goods, containers, or finished products.
The IOS sector has become one of the most sought-after niches within industrial real estate since the Covid19 pandemic, with rapidly increasingly institutional activity year over year
