{"id":1004313449,"date":"2019-04-02T04:12:56","date_gmt":"2019-04-02T12:12:56","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004313449"},"modified":"2021-05-15T04:20:09","modified_gmt":"2021-05-15T12:20:09","slug":"whats-in-store-for-the-big-box-market","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/whats-in-store-for-the-big-box-market\/","title":{"rendered":"What\u2019s in Store for the Big-Box Market?"},"content":{"rendered":"
\"James<\/a>

James Breeze, National Director of Industrial Services, Colliers International. Image courtesy of Colliers International<\/em><\/p><\/div>\n

A new report by Colliers International shows big-box facilities remain the backbone of distribution in North America, though data reveals tensions with China and ramifications from the new NAFTA passage as chief concerns.<\/p>\n

\u201cThis size range of building continues to prosper, evidenced by the record fundamentals in the markets tracked in this report,\u201d<\/em> James Breeze, Colliers International\u2019s national director of industrial services, told Commercial Property Executive<\/em>. \u201cCore markets continue to do well in terms of leasing activity and absorption, but the markets experiencing the most growth and providing the most opportunities for both occupiers and investors are secondary markets near major logistics hubs.\u201d<\/em><\/p>\n

New Challenges in E-Commerce Shipping<\/h2>\n

The rise in e-commerce sales and the changes in supply chain strategies to get products to consumers as quickly and efficiently as possible remain the top demand drivers for big-box product, especially newly constructed big-box product.<\/p>\n

\u201cOccupiers require higher clear heights, flexible power, and a slew of worker-focused amenities to gain and retain employees, and most of these needs cannot even be found in second generation product, and this is creating record development, and record leasing in these buildings,\u201d<\/em> Breeze said. <\/p>\n

The report shows that demand for big-box product is solid in core markets, yet the decreased amount of product to purchase in these markets has pushed investors into secondary markets. That\u2019s why today\u2019s investors are looking at future growth potential when looking where to place capital.<\/p>\n

According to Breeze, the top items on their checklist include close proximity to large and growing populations and robust logistics advantages.<\/p>\n

\u201cThis will drive more occupiers into these markets<\/em>,\u201d he said. \u201cThey are also of course searching high-yield opportunities. All of the emerging big-box markets provide these opportunities but look for some of the biggest growth in sales activity to happen in Kansas City and the I-4 Corridor<\/em>.\u201d<\/p>\n

Challenges to future demand<\/strong><\/h2>\n

The major headwinds to look out for are trade disputes that result in higher tariffs between the U.S. and China, the possibility that the new USMCA trade agreement is not approved in congress, and the overall slowdown of the economy at home and abroad.<\/p>\n

\u201cThere are reasons for optimism for many of these issues, but if many of them come to fruition and create a decline in retail sales or just general pessimism about future growth from occupiers, we could see a drop in demand for big-box facilities in the coming quarters,<\/em>\u201d Breeze said. <\/p>\n

In fact, it\u2019s believed industrial real estate demand could take a hit in the coming year, if no deal is reached and tariffs are increased to 25 percent.<\/p>\n

Looking ahead to the rest of 2019, Colliers is still bullish on the industrial big-box market. Even though there are more headwinds now than at any point in this period of expansion, there still remains significant demand for space.<\/p>\n

\u201cE-Commerce only represents about 10 percent of non-auto retail sales, and this is projected to grow to 16 percent in the next few years<\/em>,\u201d Breeze said. \u201cThat is a large increase in inventories being shipped directly to consumers. This increase in e-commerce will continue to increase demand for big-box space. I don\u2019t foresee demand growing significantly compared with 2018, but I do see fundamentals staying on par. This is not a bad thing, since 2018 posted record demand fundamentals<\/em>.\u201d<\/p>\n

The New Jersey industrial market<\/a> is among the nation\u2019s strongest, with Colliers International\u2019s latest report showing big-box leases have shown remarkable activity<\/a> in the area.<\/p>\n","protected":false},"excerpt":{"rendered":"

Acquisition yields held steady at 5.7 percent last year, with many of the core regions posting cap rates at or near 5 percent, according to the latest Colliers International outlook.<\/p>\n","protected":false},"author":451,"featured_media":1004313491,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21783,23891,21742,21749],"tags":[32763,32914],"class_list":["post-1004313449","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-investment","category-national","category-latest","category-retail","tag-colliers-international","tag-e-commerce"],"acf":[],"yoast_head":"\nWhat\u2019s in Store for the Big-Box Market? - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/whats-in-store-for-the-big-box-market\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What\u2019s in Store for the Big-Box Market?\" \/>\n<meta property=\"og:description\" content=\"Acquisition yields held steady at 5.7 percent last year, with many of the core regions posting cap rates at or near 5 percent, according to the latest Colliers International outlook.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/whats-in-store-for-the-big-box-market\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2019-04-02T12:12:56+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-05-15T12:20:09+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2019\/04\/Image-by-athree23-from-Pixabay.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Keith Loria\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/whats-in-store-for-the-big-box-market\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/whats-in-store-for-the-big-box-market\/\",\"name\":\"What\u2019s in Store for the Big-Box Market? 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