E-commerce-related tenant activity leads a surge in demand for Northern California industrial markets
The $44.0 billion dollar industry continues to grow
August 03, 2020
- E-commerce was a $44.0 billion dollar industry in Northern California is 2019. The COVID-19 pandemic and the subsequent shelter-in-place policies have accelerated e-commerce growth and the need for warehouse space in the region. Early estimates by Bank of America and ShawSpring Research, estimate e-commerce represented 27.0 percent of total retail sales in a matter of eight weeks since the shelter-in-place. It took four years, from 2015 to 2019, to increase by the same percentage, indicting online shopping habits are here to stay.
- Active tenant touring activity for e-commerce-related Retail industries has increased by 94.6 percent. Although this is impressive in and of itself, Retail makes up the lion’s share of total demand, increasing from 6.8 million square feet in March to 12.2 million square feet seventeen weeks later. For reference, the next closest industry is Food & Beverage which has 6.2 million square feet of active requirements in the region.
- In addition to the Retail industry, e-commerce-supporting industries have also experienced increases in demand including 3PLs, Logistics & Distribution, Consumer Durables, and Consumer Non-Durables. Many of these industries have already executed deals since the pandemic. Including Retail, these industries make up 52.1 percent of known demand in Northern California, an increase of 5.5 percent from March.