There are many to blame for the demise of malls, but there’s one important factor that’s easy to fforget: There are just too dang many of them. The U.S. has more retail square footage per person than other industrialized countries, and we keep adding newer and bigger malls without humanely putting enough of the old ones out of their misery. At the same time, online retailers like Amazon are scrambling to find or build warehouse space to keep up with customer demand.
This is a problem for the retail industry, because they need warehouse space to keep up with our shift to online shopping. While there’s literally more retail space available than the industry knows what to do with, the commercial real estate market doesn’t have enough warehouse space to keep the market supplied.
CNBC reports that an industry analyst for investment bank Jefferies wrote to clients this week that “retail sales are not in decline, but rather shifting toward e-commerce retailers who require large amounts of warehouse space.”
Since online retailers don’t have sales floors and fill orders from warehouses, they need about three times as much warehouse space as traditional retailers. As existing bricks-and-mortar retailers expand their online operations, that means they need more warehouse space, too.
About 10% of retail sales happen online right now, and that’s only going to increase. The bank recommended investing in real estate investment trusts that own warehouse space and that are building out new warehouses.
by Laura Northrup via Consumerist
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