Institutional Investor: Rising Online Retail Sales Drive Industrial Real Estate Boom
From Institutional Investor:
In the real estate market, is there a law of conservation of brick and mortar akin to chemistry's law of conservation of mass?
That question arises as the surge of online retail sales gives a strong boost to industrial real estate. At the same time, many brick-and-mortar stores are closing. "This is the ultimate irony," says Eric Frankel, an analyst for real estate research firm Green Street Advisors in Newport Beach, California.
Green Street estimates online sales boosted industrial real estate demand 30 to 40 percent last year, and analysts expect the boom to persist. Average industrial rents rose 6 percent last year, the steepest increase in 17 years, according to Green Street.
Green Street’s Frankel says supply will probably catch up with demand soon, lowering rent increases but leaving them higher than the rate of inflation.
To read the full article from Institutional Investor, click here.