These days it may seem like more and more brick-and-mortar stores in Tennessee are closing as shoppers turn to online retailers, such as Amazon, to make purchases. However, one type of real estate that has become a hot commodity exactly for this reason are warehouses.
In fact, one professional has stated that large warehouses are suddenly the hot item to purchase in the realm of commercial real estate. One real estate investment firm reports that the first six months of 2017 saw investment sales in the area of industrial real estate rise to a total of more than $23 billion — an uptick of over 20 percent. In addition, over $12 billion in additional industrial real estate deals are anticipated to be completed by the end of 2017.
Online retailers need distribution centers all over the nation, and many are looking to purchase such real estate outside of metropolitan markets. This activity has caused rent in the industrial sector to go up as well. More investors are also seeking publicly traded real estate investment trusts to gain a share in commercial real estate that isn’t necessarily influenced by the ups and downs of the stock market.
So, while traditional malls may be going out of vogue, as this shows the shift to online shopping has increased a demand for warehouse spaces. In fact, according to some, purely online retailers need more warehouse space than traditional stores do — three times as much to be exact. Therefore, now may be the time to look into purchasing a warehouse. That being said, anyone looking to enter the commercial real estate market should do their homework, and consult with an attorney to ensure they make informed choices.
Source: CNBC, “Amazon makes warehouses ‘sexy’ again real estate exec says,” Lauren Thomas, Oct. 12, 2017