3). Global supply chain trends Growing labor costs in Asia, particularly China, coupled with volatile fuel costs, have forced companies to re-evaluate their supply chain networks. "The U.S. is a huge consumer market. All things being equal, companies will want to be in close proximity to their customers as it improves speed-to-market, reduces inventory carrying and freight costs as well as reduces risks and improves customer service," said Thompson. "These critical supply chain considerations make the U.S. increasingly more attractive from a manufacturing or sourcing perspective. Companies are diversifying their manufacturing and sourcing decisions just as an investor would their personal investment portfolio. Having a physical presence in the U.S. is becoming increasingly important."4). The explosion of E-commerce in the U.S. and globally The primary industries leading the demand for warehouse and distribution space are food-and-beverage, e-commerce and traditional retailers. In fact, one-third of all demand for big-box space is tied to multi-channel retailers or 'e-tailers'. The influx of e-commerce and m-commerce (mobile) has revolutionized the retail sector. Retailers tapping multiple channels to sell their merchandise are finding it more cost-effective to increase online logistics operations rather than open more traditional stores, requiring an entirely different distribution model. Therefore, retailers are evolving their regional distribution networks to include e-commerce distribution centers. Demand from these companies has been growing since 2009 and will continue to do so.
Five Factors Driving U.S. Industrial Real Estate Market's Resurgence
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