ST. LOUIS — Nationwide e-commerce returns from the holiday season are slated to hit a record $70.5 billion, results that could spell both promise and frustration for the St. Louis industrial market.
That figure, representing the fourth quarter of 2020, marks a 73% spike from the previous five-year average. That surge is largely attributed to a pandemic-driven rise in online sales that's projected to reach $235 billion for the year, up 40% from 2019, according to a new report from commercial real estate firm CBRE and Optoro.
The growth in e-commerce is a good sign for industrial real estate developers and construction companies.
Locally, about 1.7 million square feet of industrial space was under construction by the end of 2020's third quarter, a year over year decline from 2019, when 4.4 million square feet was under construction, according to the most recent market data from CBRE. The slowdown in construction, real estate experts say, was due to a belief that St. Louis' industrial market was becoming overbuilt prior to 2020. But now with e-commerce sales skyrocketing, there's renewed interest in construction.
Brian Bush, senior vice president of CBRE's St. Louis office, said e-commerce-driven demand could prompt developers to reconsider areas like parts of St. Louis County once thought to be too saturated for new industrial projects.
"I think you're seeing an evolution in how companies are responding to e-commerce," said Brian Bush, senior vice president at CBRE in St. Louis. "The tailwinds from e-commerce, and now COVID to some extent, has propelled the industrial market even further. .. (It means) developers will be staking out territory and exploring areas in St. Louis County that maybe they wouldn't have considered a couple years back."
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