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Retail’s Increasing Need for Industrial and Warehouse Space

It is no secret that the expansion of Amazon and e-commerce has had a significant effect on the retail and real estate industry.  Not only has the rise in e-commerce changed the way some consumers shop, it has also changed the expectation for when consumers expect to receive their product.  The 7 to 10 day delivery period has been replaced by an expectation closer to 2 to 5 days.  Additionally, retailers are choosing to open their bricks and motor stores in more select and high demand markets, and then relying on quick shipping delivery times between stores for any products they may not carry.  Certain start-up retailers are establishing an online presence first, minimizing the risk, and then once their brand is firmly established, they then open stores in markets that their products have had the greatest success.

As a result, retailers are reconfiguring their supply chain to accommodate this shift in quick delivery dependency, which is resulting in an increase in demand for industrial space located closer to population centers.  Warehouse and industrial space have increasingly become a critical component to retail given the role they play in enhancing the time in which goods are delivered to the stores or consumer.  Big box stores requiring large warehouse space typically have looked for facilities on the outskirts of population centers where the facility uses include inventory fulfillment, sortation, redistribution and returns.  Urban facilities, which are smaller in square footage complement the regional hubs and assist in enhancing the speed of the delivery of goods in the “last mile”.  Connecticut’s central location in the Northeast and its proximity to large urban cities like New York and Boston lend itself to be a favorable location for retailer shipping locations.

Vacant industrial or warehouse properties in Connecticut could be prime spaces to be repurposed for shipping centers.  Important factors to be considered includes the constraints within the confines of the building and what additional structures, ramps, loading docks will need to be constructed.  Consideration should also be given towards zoning and regulatory issues, such as the permitted uses for the property, parking requirements and impact on traffic coming to and from the site.

For any questions, please contact the Hinckley Allen attorney with whom you regularly work, or one of our Real Estate attorneys. Follow Hinckley Allen on Twitter and LinkedIn for the latest news and updates.

Read more from our Real Estate Newsletter on the latest commercial trends, warehouse space, and environmental considerations:

  1. Top 5 Trends in Commercial Real Estate
  2. Top 5 Priorities for E-Commerce Tenants
  3. Environmental Insurance: What to Consider Before You Invest in a Property