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3 Ways the Industrial Market is Being Impacted by Retail

December 18, 2018 by Perry Leave a Comment

Retail trends have had a huge impact on the industrial market for the last few years. Amazon shifted the entire e-commerce industry to lightning-fast shipping, which means that industrial centers and warehouses are being moved to closer-to-the-city locations to handle the load.

On top of that, the trend toward reduced store size means that there’s more need for off-site storage and warehousing for retail products than ever before. Here are 3 other ways that the industrial market is being impacted by retail.

#1: Massive Closures of Big Retailers

Everything that you could buy at places like Sears, Kohl’s, and JC Penney can be ordered online at Amazon for less and with front door delivery. Because of that, retail giants are seeing massive closures. This year alone, Sears is closing 150 of its stores, JC Penney is planning to close 140 stores, and Macy’s is closing 100 stores but they’re not the only ones.

Brick-and-mortar retail overall is preparing for massive closures due to bankruptcy over the next year, largely because of Amazon, but also other online retailers. These closures are both haunting and inspiring for the industrial market. Those holding leases for big box stores are preparing for huge hits. Those investing in these shuttering retail stores have big new innovative ideas for how to reuse these spaces.

#2: Rethinking of Industrial Space Use

The vacancy rate for industrial space hit a low point last year with a basis point drop of 70 points to 5.6%; lower than the record low hit in 2000. Those vacancies may not last long as industrial leaseholders and investors seek to find new uses for spaces now housed by failing retail giants.

Again, e-commerce is the driver behind this trend sweeping through the industrial market; the rethinking of industrial space use. Some old shuttered storefronts make excellent fulfillment and distribution centers that are located closer to city centers. They are now being converted to handle last-minute-mile issues for new online retailers to aid in faster on-time delivery.

#3: Global Consumption Increases due to E-Commerce

U.S. retailers aren’t the only ones feeling the effects of retail on the industrial market. E-commerce has also increased global consumption and is expected to account for at least 30% of the global economy over the next several years. Products once cost prohibitive for people living in the Far East are now as easy to order online as they are in the U.S.

That has helped to expand the global reach of online retailers beyond U.S. borders. With that, the need for more physical space to house all of the goods needed to accommodate the growing global demand for faster delivery has made once abandoned industrial spaces more attractive.

Some of the top players in the global market demanding more supply from U.S. online retailers are China, Brazil, and Mexico. Expect the reach of global goods from online retailers in the U.S. to expand to other parts of the world, thus further increasing the appetite for more industrial space.

 

Written by Nicole Brzyski for Coldwell Banker Commercial Affiliates

Filed Under: Commercial Real Estate, Industrial Real Estate, News, Statistical Blurb, Uncategorized Tagged With: #educational/vocational, #gainesville commercial real estate, #manufacturing jobs, art #retail sales., Gainesville Manufacturing, Industrial and Technology, industrial real estate

End of the Current Real Estate Cycle????

May 23, 2017 by Perry 3 Comments

July of 2007 I was down in Miami visiting my daughter.  It was her Junior year studying International Business at Florida International University.  Business had been very good that year and years previous.  Good until the bubble burst.  I was paying for a nice apartment for Sara in South Beach and enjoyed visiting when I could.  Though I had heard and seen the signs of trouble looming it was hard to really believe it.  For me the bubble burst that weekend.

I was due to return to Gainesville that Sunday.  However, after checking my emails, messages, and calendar I decided to stay a couple more days.  Nothing was really going on.  Though I had a good year or two after that July slow down, it would be 7 years before things really returned to “normal.”  Those years were marked by many people leaving the Real Estate Industry, Cash Sales, and short Leases.

Here we are in 2017.  Housing market is going wild and inventory is shrinking.  Locally, Industrial space is hard to find.  Commercial prices are rising though only at a moderate pace.  Let’s hope moderation prevails as the author below is again predicting the end of the current Real Estate Cycle.  Just as he  predicted the end in 2007!  Let me know what you think!

http://blog.realnex.com/end-of-the-current-real-estate-cycle

Filed Under: Commercial Real Estate, Industrial Real Estate, Statistical Blurb

The 2016 Florida Job Market

February 3, 2016 by Perry Leave a Comment

According to the Florida Trend, Florida experienced strong job growth in 2015, adding nearly a quarter of a million jobs. Heading into 2016, Florida’s job market is widely expected to maintain its course as the Florida economy as a whole continues to strengthen.

Author and economist Kyle Baltuch goes on to say, Bloomberg Business compiled a list of the top 18 cities it predicts will have the most economic growth in 2016. Of the 18 cities on the list, nine were in Florida, including the top four, and six of the top ten, as shown in the table below.

Florida Trend - Florida Cities Leading Nation in Economic

The concentration of growth seems to be regional, as nearly all of the Florida cities on the list are located in Southwest or Central Florida. Small and moderate sized metropolitan areas in Florida have moved to the top of the list largely due to the fall of oil and gas hubs from the ranks, according to Bloomberg (Baltuch, Florida Trend).

Read the full article here.

Filed Under: News, Statistical Blurb

Third Quarter Commercial Transactions

December 17, 2015 by Perry Leave a Comment

From the National Association of Realtors, “commercial transactions have slowed in the third quarter of the year, after strong gains at the onset of 2015. The volume of commercial sales in Large Commercial Real Estate (LCRE) markets totaled $115 billion, a 3.0 perfect year-over-year increase, according to Real Capital Analytics (RCA). The third quarter data marked a noticeable slowdown in deal momentum for LCRE markets, with September’s sales volume dropping 10 percent year-over-year. In comparison, sales volume advanced 49 percent in the first quarter and 23 percent in the second quarter.”CRE Sales Volume

Filed Under: Commercial Real Estate, News, Statistical Blurb

Industrial Employment Gain

December 15, 2015 by Perry Leave a Comment

According to the National Association of Realtors in their recent study, with demand for industrial properties rising, transportation and warehousing employment gained 23,700 new positions, while wholesale trade employment rose by 4,000 jobs.Payroll Employment Change

Filed Under: Industrial Real Estate, News, Statistical Blurb Tagged With: industrial real estate, industrial real estate news, statistics

Coldwell Banker M.M. Parrish
Coldwell Banker M. M. Parrish Realtors

352.665.9731
ppursell@mmparrish.com

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Gainesville, FL 32607

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