Predicting Growth in Secondary Markets in 2021
On Industrial Strength, host Chase MacLeod and industry experts will explore trends in industrial real estate and provide insight into the worlds of industrial real estate development, investment sales, dynamics in leasing markets and trends for eCommerce and logistics.
When the world turns, we turn with it. As 2020 forced us all to adjust to our new reality, one such turn was an increased reliance on eCommerce. The effects of this sudden eCommerce boom have trickled down and affected countless industries. Chase MacLeod, host, Industrial Strength had the opportunity to pick the brain of industry expert Curtis Spencer, President, IMS Worldwide Inc., about industry trends that may affect the logistics industry.
“The good news about being where I am and our company and all 10 people that we have working with us is that we get to watch trends, discuss those trends with our peers, and really wait for it when it really becomes a trend. Then we report on it,” Spencer explained.
To stay on top of industry trends, MacLeod reads 16 trade magazines a day to learn more about what is happening in his industry.
One such trend he’s picked up on is a surprising one.
“We’ve seen some very weird growth that we would have never expected, especially in secondary markets. But I have to tell you, any state close to California is going to grow like a wildfire,” Spencer said.
This is just one example of how paying attention to market trends can provide valuable business insight. If there’s anything we learned in 2020, it’s that being flexible and adaptable are key traits for any business that wants to survive trying times.
Curtis was an early believer in the possibility of eCommerce requiring more warehouse space, and that has paid off each year in the form of a ~16% annual increase. But the lockdowns in the U.S. helped sky rocket that eCommerce growth to 40%. Countries abroad saw even higher increases in eCommerce and, while the cause of that jump might be temporary, the need for space to accommodate those shipments are here to stay.
Retail giants like Walmart and Amazon make a lot of waves with their massive warehouse needs, but one of the biggest growths Curtis has seen has come from midsized players. The market for 100,000-400,000-square-foot warehouses has exploded as a result.
Obviously, these buildings are a heavy investment, and companies should keep a keen eye on how to future proof their investment. When looking for a new facility, every player should be looking to double their ability to park trucks. Curtis is carefully watching the growth of autonomous trucking and how that will impact faster transportation timelines.
Check out the first episode of Industrial Strength for more insight from MacLeod.