Change in Buying Habits Leads to Real Estate Warehouse Boom

The industrial real estate sector is seeing a bright spot: Warehouse demand is surging. The COVID-19 pandemic lockdown has changed consumers’ buying habits. While some could view it as temporary, companies are re-evaluating how to better handle more bloated supply chains in the future. Amid the pandemic, consumers are stockpiling essentials, such as toilet paper and cleaning supplies, and rushing to stock up at grocery stores. Even apparel stores and other retailers are fielding more online orders as their physical stores remain temporarily closed. The need for space to store more goods is growing. E-commerce operations are requiring more storage space, and companies are ramping up more “safety stock” and rethinking previous lean-inventory strategies. “There’s this move away from just-in-time [inventory], so the tenants are getting fatter,” Kevin McGowan, president of McGowan Corporate Real Estate Advisors, which specializes in industrial real estate, told The Wall Street Journal.