Before the Covid-19 pandemic, retailers and third-party logistics providers would often come into a market for a short time and lease extra space to deal with the increased volume of merchandise returned after being purchased online.
In the Valley this year, many of those companies are making longer-term space commitments as shopping has increasingly shifted online during the pandemic.
“From a local perspective, we have seen a large increase in demand this year, especially from retailers and third-party logistics companies,” Rusty Kennedy, senior vice president at CBRE Group Inc. in Phoenix, said. “A lot of times these companies come in around the holidays for a short time, but this year we’ve seen an exponential increase in both the number of companies and the size.”
According to CBRE's study of National Retail Federation data, online sales across the country in November and December will reach nearly $235 billion, a 40% increase from the same time last year. On average 30% of items that are purchased online are returned. Across the country, as much as 400 million square feet of space could be used to process returns over the next five years.