E-commerce Warehouses

There is a stable rise in e-commerce which drives the need for new logistics and strong financial fundamentals. It also calls for the development of giant warehouses. These e-commerce warehouses are needed by many entrepreneurs like dropshipping suppliers. This opens a window of opportunity for the real estate industry where lots of lands are still accessible to build these giant warehouses.

Ed Lampitt, an industrial real estate for commercial real estate firm Cushman & Wakefield said “It’s the greatest industrial market ever. St. Louis is approaching one of its strongest years for industrial property.”

“There are no financial signs to point that the marketplace is cooling off, so to speak,” stated Vince Bajardi, leader of Clayton-based Sansone Groups commercial property training.

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Developing e-commerce warehouses in St. Louis

The demand for e-commerce warehouses continue to grow. At the moment, there are e-commerce companies that need about 700, 000 sq. feet of warehouse space and there's just one structure available that will accommodate the need.

Despite a surge in the projected warehouse building in large logistics parks in Edwardsville, Hazelwood, and St. Charles County, there is only one that's finished last year which is approximately 4 million sq. feet of industrial space. This is in addition to the 6 million sq. feet already delivered in 2016.

​Big users happen to be occupying the new space. The e-commerce giant Amazon alone has rented out over one million sq. feet in Edwardsville and Hazelwood. “For the last 3 or two years we've been bringing businesses which haven't been in St. Louis before,” said Geoff Orf, senior VP in commercial real estate firm Colliers St. Louis office. “And a number of the high profile tenants who have come to the city have attracted other businesses.”

Upcoming e-commerce warehouses in Edwardsville

• Earth City-based TriStar is developing a 600, 000 sq. feet projected warehouse in Gateway Commerce Center. The project is nearing its completion.  
• ​Fenton based, Kadean Construction is developing a 769,000 sq. foot warehouse with light industrial edifice in the Lakeview Commerce Center for Panattoni Development.

All of the speculative building has increased the vacancy rates. Gershman Commercial Real Estate based in Clayton estimated the total vacancy rate marked up to 5.3 percent in the 4th quarter of last year from 4.9 percent in the 3rd quarter.

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