What is happening: Developers are now turning to old retail spaces for warehouse conversion as demand rises.
Convert: According to CBRE, since 2016, there have been 24 separate projects converting old retail space into warehouse space. These will turn 7.9 million square feet of retail space into 10.0 million square feet of warehousing space.
Why is this happening: Big box stores are now struggling due to the rise of e-commerce, and for the same reasons, warehouse demand is surging.
What did Americas leader of CBRE’s industrial and logistics business, Adam Mullen say: “These types of conversions were once unthinkable, and now they’re not only happening, they’re gaining traction. That industrial uses can overtake what are usually higher-rent uses illustrates the strength of demand for industrial real estate, especially last-mile distribution centers.”
What did CBRE say: “Freestanding big-box stores closer to population centers than warehouse districts are the primary candidates for conversions; the retail structures typically offer dock doors, ample parking and clear heights compatible with industrial usage.”
What did CBRE research analyst, Lisa Denight say: “Ecommerce, and its attendant ‘last mile’ concerns about getting goods to consumers has driven industrial availability down in markets across the country, especially for infill locations close to population centers — which is a large part of why these retail to industrial conversions are attractive.”