Why Online Shopping Is Causing a Land Rush
Shipping Shake Up
The massive demand for consumer products and growth of online shopping during the pandemic is making an impact on the real estate sector. Companies need places to store products and space where employees can package them. This has driven up prices for warehouses and properties turned into fulfillment centers.
The land rush has caused water-adjacent locations to enjoy a similar rise in value. Port operators and logistics firms are now in a race to secure vacant property near terminals. That space is vital because after packed containers are unloaded from ships they need a place to sit prior to being picked up by trucks or trains. Asking rents and property values have soared at spots near major ports.
Double the Days
To understand how shipping operations have been changed by the massive growth of online shopping, it’s useful to count the days. In years past, loaded containers came off ships and awaited further transport for around five days, according to Port of Savanna officials. Since the pandemic that number is closer to eight days and sometimes as high as 10.
In response, the port has leased space in Alabama, Georgia, and North Carolina for use as “pop-up” storage container facilities. Savannah is also one of the nation’s fastest-growing ports. The trend is ongoing coast to coast. In Long Beach, California, industrial rents are skyrocketing as the sector’s vacancy rate in Los Angeles is under 1%.
Land in Demand
The need for space in and around ports has property owners taking unusual steps. Perfectly good buildings are in danger of being torn down as companies seek out vacant land where they can stack containers. Creativity is also coming into play. Vacant department stores and empty mall parking lots are being used for container storage in California.
Industry experts say pop-up storage facilities are likely to become the norm. Consumers may discover it’s common to find metal storage containers where shoppers’ cars used to be. Online shopping isn’t slowing down anytime soon, and they’re not making any more land.
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