E-commerce 2.0: Last-mile Delivery and the Rise of the Urban Warehouse

By James Breeze

Today’s industrial users are looking beyond rental rates to consider transportation and inventory carrying costs when making location decisions.

THE ERA OF e-commerce began unceremoniously in July 1995, when Jeff Bezos boxed up the first book sold on Amazon.com from his Seattle garage. Over time, nearly all major retailers began selling and shipping items from their own websites. This is now having a monumental impact on the way goods are created and distributed — and on the industrial real estate necessary to do so.

By the end of the second quarter of 2016, e-commerce sales had grown 16 percent year-over-year, a rate that dwarfs the 2 percent overall retail growth for the same time period. Enormous e-commerce sales have been a boon to industrial real estate, with record-low vacancies and record-high asking rents, net absorption and development.

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