COVID-19 has changed the world for individuals and businesses. These changes have carried over into different markets. Here are some of the impacts that COVID-19 has had on industrial real estate. Supply Chain Ever since COVID-19 spread worldwide, supply chains have been under considerable strain. This has caused many businesses to rethink their ordering of raw materials. Companies now seek to source their materials from local suppliers or even large warehouse lots. For industrial real estate, this creates an increased demand for warehouse space. E-commerce Businesses were already transitioning to more and more e-commerce activities to produce revenue before COVID-19. The advent of the pandemic caused many companies to rethink their business models and shift to more remote work. As part of this shift, there has been a decrease in the need for downtown office and retail space. However, there is also an increased demand for industrial buildings to serve as hubs for e-commerce order fulfillment. Debt Markets Governmental entities across the globe have provided unprecedented levels of stimulus to their constituents. The increases in government spending have put inflationary pressure on world economies. As a result, interest rates fluctuate regularly with no absolute certainty on how long they will stay low or when they will go up. For industrial real estate, this creates unpredictability in the type of financing available for possible expansion. Lockdowns Other government actions to address the pandemic have included lockdowns. The lockdowns have forced in-person consumer activity to slow at retail, dining and entertainment venues. For manufacturers with industrial real estate, lockdowns have created a new way of attracting workers. Locations that were previously beneficial due to available cultural and entertainment outlets may no longer be viable. Despite the seismic shifts caused by COVID-19 to the global economy, industries such as real estate have seen some benefits and have adapted to the quickly changing landscape.
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AuthorHello, my name is Roger Dennison and I'm a successful commercial real estate broker, with more than 20 years in the field. Archives
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