If you build it – will they come?
JLL’s Industrial Impact series overview
The effect of e-commerce fulfillment
With e-commerce fulfillment being one of the strongest dynamics driving industrial real estate demand, the resulting need for warehouse labor has also increased dramatically. This, combined with a decreasing unemployment rate, has forced up labor costs and caused seasonal shortages for many operations around the country. Read more…
Real estate growth of e-commerce fulfillment
From 2010 to 2014, e-commerce was the third most active industrial sector, accounting for 16.1 percent of all “big-box”* transactions nationally, just behind traditional retail and consumer non-durables (both with 16.7 percent). However, over the last two years, not only has e-commerce become the most active sector (22.5 percent), but the gap among the top three has widened significantly (3PLs: 15.2 percent; consumer non-durables: 12.1 percent). Furthermore, traditional retail dropped to fourth (10.4 percent) as pure-play e-tailers and omnichannel retailers continue to build out their logistics footprint. Read more…
Labor market constraints
On average, industrial markets with elevated levels of e-commerce leasing activity have seen median wage rates for laborers and freight stock employees increase by 5.8 percent from 2013 to 2015; meanwhile, in the same areas wage growth for all occupations only increased 2.7 percent.
Wages increase 2x
With “big-box” leasing around the country continuing to flourish and unemployment rates steadily reaching new lows, continued wage growth for warehouse associates is expected to outpace many other employment sectors, putting upward pressure on overall total landed costs. Read more…