Online Sales, Returns Fuel Valley Industrial Demand for the Holidays and Beyond

Article originally posted on Phoenix Business Journal on December 28, 2020

The Covid-19 pandemic has accelerated the trend toward online buying, yet a larger portion of items bought online are returned, compared with items bought in person. That has given rise to a surge in industrial demand in the Valley, to handle what’s known as reverse logistics.

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.”

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