E-Commerce Sales May Hit $1.5T by 2025
By: Lisa Brown
The rapid adoption of e-commerce, accelerated by the COVID-19 pandemic, has led to rampant growth in the industrial property sector. As a result, industrial continues to be one of the most desirable asset classes for both investors and lenders.
In fact, JLL expects e-commerce sales could hit $1.5 trillion by 2025, which would increase the demand for industrial real estate to an additional 1 billion square feet.
With continued demand from e-commerce for warehouses and distribution properties, vacancy continues to tighten. This has solidified the Inland Empire West submarket as a top industrial and logistics hub, according to Lee & Associates.
IE West’s availability remained tight from the previous quarter, going from 6.02 percent to 4.93 percent in fourth quarter. Vacancy levels dropped from third quarter 2019’s 2.1 percent to 0.96 percent. This activity has not only fueled leasing demand but also driven asking lease rates to a high of $0.820 NNN.
The West submarket continued the positive net absorption through the fourth quarter, standing at nearly 5 million square feet, surpassing 2019 year-end net absorption at 4.3 million square feet, according to Lee & Associates.