Urban e-commerce tenant demand has nearly tripled this year in the U.S.
Coupled with a jump in e-commerce leasing activity, 2020 has intensified the need for urban fulfillment centers.
December 07, 2020
Share of tenant requirements in the e-commerce industry, as a percent of all requirements
- 2020 saw unprecedented growth in e-commerce volumes (both in tenant demand and leasing), primarily due to COVID-19 boosting online sales. We expect this trend to have a lasting impact on how people shop, with a continued increase in activity over the next few years for the e-commerce industry.
- The fast pace of new e-commerce demand is leading to new solutions to fulfill space needs. In urban areas, we are seeing innovative ways to deliver products. To name a few: dark stores (shuttered retail spaces) are being converted to fulfillment centers; existing stores are adding fulfillment operations in their now less trafficked aisles; and delivery companies are considering lease terms as short at 6 months in retail spaces to gain any edge on delivery times.
- With the increase seen in e-commerce tenant requirements over the past year, coupled with the huge jump the industry’s existing leasing activity, we expect the need for last-mile space to continue to rise, particularly in our Urban Logistics markets.
- A major shift in e-commerce purchases is expected for the upcoming holiday season. According to E-Marketer, U.S. consumers are expected to spend $190.5 billion this year on holiday e-commerce purchases, a 35.8 percent increase from 2019.