“The more there’s demand, the more supply increases, that’s economics 101,” Jason Tolliver, a Cushman vice president and Head of Industrial Research for the Americas, told Curbed. “But what we’ve seen with this cycle is it’s taking a long time for supply to catch demand. We think by the end of next year, supply may finally catch up.”

Increased Demand for Warehouses

The sudden rise of online giant retailers like Amazon has increased demand for warehouses to store inventory. Around 25% to 30% of warehouse space is currently dedicated to e-commerce.

“Online fulfillment isn’t about delivering direct to store anymore, it’s about delivering, sometimes multiple times a day, to a household,” Tolliver added. “If you asked someone in 1999 if they could order anything they want on their phone, get it delivered in an hour, and then return it for free if they don’t like it, they would say you’re crazy. But that’s what Amazon is forcing the industry to become. I think it’s going to be very recession resistant, since even if the economy softens, consumers will still want to order the basics.”

To capitalize on this potential growth trend, investors can look to something like the targeted Pacer Benchmark Industrial Real Estate SCTR ETF (NYSEArca: INDS), which offers investors exposure to US companies that generate the majority of their revenue from industrial REITs that are part of the e-commerce distribution and logistics network. INDS provides exposure to growing e-commerce space by investing in data center and distribution center REITs, along with higher quality retail real estate.

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