In my travels to various chapters this year, I’ve been focusing on the issues surrounding the changing face of commercial real estate. We’re becoming more diverse by gender and ethnicity, and it’s exciting to see how new voices are helping our industry grow.
Outside of the sheer demographics of our industry professionals, commercial real estate is experiencing a shift of its own — and no segment is seeing that more than industrial real estate. After a long road of recovery following the recession, there’s a renewed sense of optimism with regard to industrial real estate — but some of the opportunities are coming in a different form, as this issue’s cover story and other articles make clear.
When Amazon.com started in 1994 as the “Earth’s largest bookstore,” I don’t know that anyone would have predicted they’d become the behemoth company they are today. But companies like Amazon and eBay have been shaping e-commerce into the fastest-growing retail network in the world, one that has massive implications for our industry.
In the past, manufacturers relied on distribution centers to get their goods to stores — but these spaces were designed to fulfill large orders of the same product, going to the same location. Now, thanks to the “instant gratification” mindset of e-commerce, companies are supplementing, and sometimes replacing, these distribution centers with e-commerce fulfillment centers that send goods directly to consumers. These warehouses feature extensive truck and trailer parking, more loading docks, higher roofs, larger employee parking lots, and expanded power systems. And, ideally, they are located close to population centers, with access to excellent road and rail networks.
This is where we, as commercial real estate professionals, are making the largest impact. From retrofitting existing structures to finding land to develop new fulfillment centers, it’s up to us to lead the charge and help businesses find the right spaces to meet their needs. This will require us to analyze locations, logistics and zoning codes, as well as work with our clients to help them maximize local and state tax incentives for these new spaces.
Another major consideration for commercial real estate professionals is e-commerce companies’ increasing need for more robust technological infrastructure. This means an increase in data centers and other technology-based real estate, which will require specialized expertise from commercial real estate professionals like us.
One of the biggest takeaways I received from attending the NAIOP E.CON conference in Arizona is that e-commerce is changing how business is done across all industries, and it’s changing at a speed we’ve never seen before. For more on this, see “The View From E.CON” and visit NAIOP’s new online “E-commerce Evolution” center at www.naiop.org/ecommerceinfo.
We’re optimistic that the recovery of the industrial sector means even more positive things to come for the entire industry. In the same way that our previous recession did not mirror downturns of the past, our recovery is blazing its own path and highlighting some of the fundamental shifts that are changing the way that companies — and people — do business. By leveraging our abilities to create meaningful and profitable relationships, while staying cognizant of these emerging trends, we can position ourselves to not only survive whatever changes come our way, but to thrive.