Are E-commerce Fulfillment Centers Valued Differently Than Warehouses And Distribution Centers?

By: Dr. Jonathan A. Wiley

Release Date: October 2015

Are fulfillment centers distinct real estate products? Some in the industry believe they are; others believe they are not. According to the results of this analysis, fulfillment centers are not significantly different from nor significantly more valuable than other types of warehouse and distribution facilities.

This study is among the first to explore this question. It uses a unique research design that lays the groundwork for practitioners, consultants, academics and others to build upon in future studies. It identifies a sample of 371 e-commerce fulfillment centers by combining information from Internet Retailer’s Top 500 Guide and CoStar databases.

Given the steady increase in online shopping that has occurred since 1994 — when Amazon launched its Internet bookselling business — purpose-built e-commerce fulfillment centers will continue to be constructed. Understanding the place of pure e-commerce fulfillment centers among all types of industrial structures is especially important to developers, tenants and investors as they assess development costs, lease terms and valuations.