With e-commerce sales surging past 20% during the pandemic, shopping center operators have had serious discussions about turning their empty department store anchors into last-mile distribution centers. Now one of the world’s largest real estate services companies has joined the conversation.
JLL has announced the formation of the Retail Industrial Task Force, a unit that will employ members of its industrial real estate team to advise retailers and center owners and operators on supply chain management, e-commerce distribution, and urban logistics, among other topics.
“Pre-COVID, only the top global retailers were truly investing in and focusing on the last mile. Now we see a tremendous opportunity to help all retailers…with every area of expertise required today,” said Kris Bjorson, head of Retail E-commerce Distribution at JLL.
Naveen Jaggi, the president of Retail Advisory Services, said that retailers and center owners wanting to take advantage of opportunities require better understanding of how institutional investors value real estate assets. “Dark stores or vacancies often present an ideal opportunity for last-mile fulfillment center conversions, especially as e-commerce delivery competition continues to grow,” Jaggi observed.
While retail real estate has suffered mightily during the pandemic, industrial sales and leasing has boomed. As a result of the rise in online grocery adoption, e-commerce leasing of warehouse space totaled 55.9 million sq. ft. year-to-date in Q2 and Food & Beverage increased to 11.4 million sq. ft.
“Some sectors are growing in demand faster than available warehouse supply—especially in high-density urban environments,” said Craig Meyer, president of Industrial for JLL.