Business is always good for the economy, but to keep businesses in, well, business, they often require retail, office, or warehouse space of some sort. Some require space to manufacture products, while others require space to distribute their products, and some simply need office space to manage the behind the scenes work. So it should come as no surprise that the storage, warehouse, and commercial leases industry in the U.S. is worth about $26 billion, and that number is expected to grow and demand for space increases. And it will.
Storage space demand, whether for manufacturing warehouse space or commercial warehouse space, has been growing annually by a little over 7%. Why? Because online and offline retailers are expecting continued growth throughout the foreseeable future. E-commerce alone is forecasted to grow at an annual average of 10%, creating a demand for even more retail, warehouse, and distribution space. Over the next five years, online and offline retailers will be in need of a combined 25 million square meters worth of additional space. But this growth isn’t new. Occupied distribution and warehouse space has jumped an impressive 86.2% since 2000, and between 1990 and 2003, the industry built nearly four billion square feet of warehouse space.
There’s no doubt about it, office, warehouse, and retail space is in demand. A total of 70.2 million square feet of office space alone was absorbed by the U.S. markets in 2014. This was the highest demand of office space since 2006! This demand hasn’t only spurred warehouse, retail, and office space development, but it’s spurred speculative building as well. This means that construction is being done without actual signed tenants yet. Infact, about 62% of warehouse development in 2013 was on the path to construction without signed tenants. But because of the demand, the industry knows that eventually those spaces with be leased or purchased.
The demand for leasing retail space, warehouse space, and office space is also good for the industry in terms of jobs. Because the warehouse leasing industry is so busy, there are an estimated 166,907 employees working for the storage and warehouse leasing industry. And as long as people continue leasing retail space, office space, or warehouse space, the commercial real estate development industry will only continue to grow and be successful, which is good news for all involved.
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