What trends are happening in commercial real estate?
We are already into October 2018 and Price Waterhouse Cooper had predicted this year we would continue to see a surge in demand for industrial warehouses as e-commerce continues to takeover brick and mortar stores. They predicted that there will be a big demand for industrial warehouses in prime transportation hubs to be used for e-commerce logistics, distribution and fulfillment.
It is clear this prediction is coming to fruition by just walking around West Edmonton Mall. Many retail spaces are either vacant or moving to establish better foot traffic. Last Christmas W.E.M. created a pop-up micro stores retail space in Phase III for smaller businesses who can’t afford to have retail space all year round (RAAS). Retailers are being forced to get more creative as our economy shifts to e-commerce.
The demand for industrial warehouses is obviously increasing as Amazon will be opening a 45,000 square foot fulfillment warehouse centre in metro Vancouver in 2019. They are also opening another distribution center in Balzac, Alberta (located North of Calgary). A 481,000 square foot MTE Logistix distribution center is being developed in West Edmonton. PWC indicated that the Edmonton region is also seeing a 20% prime office vacancy rate. As a result, older office buildings are being forced to rezone, renovate and re-evaluate their usage.
What kind of commercial real estate trends do you think we will see for 2019?