As physical retail spaces like shopping malls lose relevance, they are often replaced by warehouses and distribution centers that support the growing e-commerce model. This trend is causing disruption – and creating opportunities – within the real estate sector.

Key Takeaways

  • Online retail sales have grown exponentially in recent years, putting pressure on the physical retail real estate sector, and we expect this trend to continue.
  • We believe we are in the early phase of a transition that could generate increased demand for industrial logistics real estate (i.e., warehouses). In 10 to 15 years, we expect warehouse space could represent a larger market cap than retail real estate.
  • As this transition unfolds, we think it is important to be selective in identifying those companies that are able to adapt their offering and continue to thrive.