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Do Big Retail
By Steve Lewis
While much of the economy, and certainly many real estate
sectors, remain in the doldrums, retail warehouse space is a
stunning exception, say SIORs. Much of the demand, they
note, is due to increasing growth in internet sales and the
attendant need for more fulfillment space.
“There is absolutely a need for retail warehouse space.
In fact, retailers are taking on, incrementally speaking, a
greater amount of warehouse space,” says Anthony J. Lydon,
SIOR, CSCMP, managing director, Industrial | Supply Chain
& Logistics Solutions, Jones Lang LaSalle Americas, Inc.,
Phoenix. “The reason for that is a significant increase in
internet retail sales.”
“Internet sales were up 8. 7 percent in 2009—even though
it was a horrendous year for the economy—while every
other sales measure was down,” notes Lydon.
Lydon cites Richard Cain, Macy’s vice president of
operations, as saying that internet sales are increasing at
12 percent to 15 percent a year—a five-year trend. “This
is a very exciting growth-oriented reality that many parts
of the country are going to experience,” he predicts. “The
implication is greater demand for fulfillment space versus
“This is not your father’s warehouse,” Lydon asserts.
“The occupier is a value-add pic-pack-ship activity that also
provides reverse logistics, showroom, training, and perhaps
customer support solutions.”
Gabriel Silverstein, SIOR, president of Angelic Real
Estate, LLC, in New York City, also sees strong demand.
“The simple answer to the question of whether big retail
companies still need warehouse space is ‘yes,’” he asserts.
“In fact, a lot of them have been very active in logistics and
distribution space in the past six to 12 months.”
In the past 30 days, Silverstein says, Amazon has autho-
rized the start of the construction process for two warehouses
in the Southeast totaling close to one million sq. ft. each, and
is looking at as many as 10 or 11 around the country. “That’s
a major supply chain revamping,” he observes.
Strengths in the Sector
Silverstein cites two major factors for the strength in this
sector. “One is the lack of product, plus a supply of money