Logistics Real Estate and COVID-19: Supply Chain Shifts Poised to Generate Substantial New Demand

In the fifth installment of our special series on COVID-19 and its implications for logistics real estate, we quantify the potential increase in long-term demand from higher inventory levels and accelerated e-commerce adoption in the third phase of the global pandemic, what we refer to as the "new normal".

Accelerated e-commerce adoption and higher inventory levels have the potential to generate 400 MSF or more of additional U.S. logistics real estate demand, or 150-200 MSF per year for two to three years.

  • Re-tooling supply chains for increased e-fulfilment should create incremental net demand of 140-185 MSF in total.1  E-fulfilment demand should be highest in locations near end consumers, such as in Last Touch® and City Distribution properties.
  • Inventories could increase by 5-10% in a bid for resiliency, producing 285-570 MSF of aggregate incremental demand.2  New demand from inventory growth could be spread more evenly throughout distribution networks.

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