The Future of Industrial Real Estate 2020

The world is changing faster than ever. In the last year, it has seemingly changed beyond recognition. As such, countless industries are being forced to adapt and keep up, and this is extremely true when it comes to industrial real estate.

The Future of Industrial Real Estate 2020

In fact, the industrial real estate market was already going through a period of immense change before the COVID-19 pandemic. Today, it is nearly unrecognizable. Furthermore, many of the changes that have been introduced by the pandemic are not truly new. That is to say, they are simply examples of things that were already happening, sped up to unprecedented levels. In this post, we will look at what this means for the future of industrial real estate in 2020, and what we can expect in the wake of COVID-19.

How the Market is Changing Due To COVID-19

The biggest impact on the industrial real estate market this year has of course come from COVID-19. This has changed the face of businesses across all industries. In fact, the way that these businesses have been affected varies widely depending on the said industry. Many of these have different impacts on the industrial real estate market. For example, consider those businesses that have been forced to shut their doors, and that may have therefore gone out of business shortly after. A good example of this would be any factory that requires too much interaction in close proximity in order to continue producing its product. Such businesses may have had to close temporarily, and some may never reopen. This, of course, comes at great cost to the industrial real estate market in general as there is less demand for that real estate.

Where Real Estate Should Focus

But meanwhile, other companies will be rushing to increase their storage, their logistics, and more. Of course, in the wake of restricted travel and the closure of many high-street stores and face-to-face businesses, more and more consumers are turning to online shopping. We have seen companies like Amazon absolutely thrive during this time, to the point that they’ve been slashing the commission shared with affiliates simply because they no longer need that kind of promotion. In an age where going to the supermarket is stressful, Amazon steps in. But likewise, so too are more and more grocers offering home delivery, as are countless other businesses. Those companies that already offered home delivery are now drastically ramping up their ability to fulfill an unprecedented number of orders. The demand for warehouse storage is increasing then, while warehouses that rely on a physical workforce are shutting down. In order to thrive in this new market, real estate needs to focus on fulfilling the needs of large-scale storage and logistics.

There’s No Going Back

Something else that’s important to understand, at this point, is that there is no going back. To clarify, now Pandora’s Box has been opened, there is little chance of business returning to normal. Consumers have become accustomed to getting their shopping delivered. They have started to enjoy eating takeouts from companies that previously never offered that option. And it makes sense for other reasons too: it’s in many ways cheaper for those companies and also reduces the amount of wasted fuel and energy – making it a more energy-efficient option. Many companies would have done this decades ago were it not for lack of investment and infrastructure, and now fate has dealt them this hand and forced the action. Moreover, companies have learned that they need to be highly flexible and adaptable. While future pandemics are a very real possibility, these provisions must remain in place if businesses are to continue to thrive.

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