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How E-Commerce Is Changing the Face of Industrial Distribution Center Real Estate

The continuing rise in e-commerce retailing is transforming the landscape of industrial real estate development, as distribution center trends increasingly cater to the e-commerce sector.

Q4 / Fall 2013
Today, 12 percent of U.S. industrial construction, on a square-footage basis, is e-commerce related — while roughly one third of all industrial big box demand is correlated to e-commerce, according to a Jones Lang LaSalle report.

There are a few usual suspects already succeeding in the e-commerce world, says JLL's Managing Director Rich Thompson. But they are not alone. "It's really exciting to see…all the other retailers are going through the same challenges and looking to develop an in-house e-commerce strategy." Indeed, a host of familiar retailers are taking note of successful e-commerce stories, one of which has experienced 3.3 percent store sales growth from 2011–12, while its web sales were up 20.3 percent over the same time period.

There are a few key ways in which retailers are adapting to this growing demand, from dedicated e-commerce strategy, to multi- or omni-channel strategies that involve a mix of traditional retail outlets and distribution center networks. And with e-commerce sales expected to nearly double in the next four years, it's no wonder big box retailers are working to stay relevant in today's market by updating their distribution center networks.

JLL's Managing Director Rich Thompson discusses the ways in which industrial distribution center real estate development is changing with the continuing expansion of e-commerce.

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