Prologis Report: Retail to Industrial Real Estate Not a Sure Bet
Wondering whether that empty retail anchor store would work as an ecommerce site? While industrial real estate is booming and bricks-and-mortar retailers are on the downslide, conversions are not always a sure bet. According to a recent Prologis report, retail-to-industrial real estate conversions will likely account for less than 1% of all retail space across the country over the next decade. This is because there are economic, political (municipal opposition and other factors), physical, and legal challenges.
According to the Prologis report:
- The COVID-19 crisis fueled five years of evolution in the retail sector — in less than five months. The massive demand for consumer goods, groceries and other household items forced the industrial sector to respond quickly. This accelerated the adoption of ecommerce (to wider audiences and many new users) and pushed companies to focus on their “just-in-case” inventory.
- Online spending is driving significant demand for logistics space, which is seeing correlating rental rate increases.
- Online sales have skyrocketed and are on pace to reach $340 billion globally in 2020.
See this Bisnow story for more details.