The proliferation of e-commerce is redefining the role of real estate in the retail supply chain. The U.S. Census reports that e-commerce revenue grew by an annualized rate of more than 21 percent between 2000 and 2014 while in-store retail sales grew at less than 3 percent. The growth in online shopping and its higher rate of product returns have combined to dramatically increase the need for warehouse space. There is a significant opportunity for real estate investors who are able to identify and capitalize on industrial real estate that meets the needs of tenants who see their supply chain as a key competitive advantage. These opportunities will be available in a variety of markets and properties. But the greatest opportunities for gain will be in locations largely ignored by the institutional investment community due to market size and perceived quality, yet hold favorable e-commerce distribution characteristics.
Developers are responding to the online shopping trend by b