E-commerce companies are gobbling up newly built warehouse space across the U.S. to become one of the leading industrial tenant types in the country, according to recent data released by JLL.
E-commerce tenants now account for 16 percent of industrial activity in Miami and 12 percent nationwide, which ranks second behind logistics firms.
During a presentation titled “The E-Commerce Revolution at the Four Seasons Hotel Miami, JLL retail e-commerce analyst Matt Powers said Amazon and other online retailers are driving demand for new warehouse space that is close to their customers.
At the same time, traditional retailers like Walmart are starting to experience year-to-year growth in online sales, which is also pushing leasing activity on the industrial side, Powers said.
“[This trend] is still in its infancy,” Powers said. “There is still plenty of room to grow.”
Walmart’s e-commerce business is second only to Amazon, which has given other major retail companies confidence in going up against Amazon, Powers added.
“Walmart’s year-to-year growth in e-commerce has shown they can compete with Amazon,” he said. “There is recognition among a lot of big-box retailers to get aggressive [about e- commerce.]
As a result, JLL’s big box retail clients are increasingly addressing their warehouse and logistics needs, said Rich Thompson, JLL’s supply chain and logistics solution international director. “It has never been busier for us,” he said.
According to JLL’s findings, Miami’s industrial real estate market is experiencing a return to pre- recession occupancy levels and rental rates. Year-to-year, warehouse and distribution center rents are up 6 percent to $7.24 a square foot. Since 2010, rents have leapt 41 percent, per JLL.
And with more than 2 million square feet of new industrial space set to be occupied over the next six months, it could drive absorption to new record highs in 2018.