Increase in E-Commerce Creates a Booming Demand for Warehouse Space

Increase in E-Commerce Creates a Booming Demand for Warehouse Space
Increase in E-Commerce Creates a Booming Demand for Warehouse Space

As foot traffic in brick-and-mortar stores continues to decline, commercial real estate is being hit hard by mall closings. But that’s good news for warehouse landlords, who are seeing an increase in demand driven by the rise in online shopping.

Warehouses: The Hot New Real Estate Properties

Most retail properties are controlled by real estate investment trusts, also known as REITs. Retail store closings and bankruptcies have caused retail REITs to drop nearly 20 percent in early 2017.

On the other hand, industrial REITs that control warehouses are benefitting from a demand that outstrips current supply. Jonathan Petersen, analyst for global investment banking firm Jeffries, says the shift to e-commerce has caused price targets for industrial REITs to be raised across the board.

According to industry estimates, online retailers require three times as much warehouse space as traditional brick-and-mortar retailers. Peterson explains that e-commerce makes up 10 percent of retail sales, and simply doubling their share would create a need for 600 million square feet of new warehouses.

What Does the Future Hold?

The increase in e-commerce and warehouse demand is more than just a cyclical event. Peterson goes on to say that he and Jeffries see it as the beginning of a “secular growth trend” that’s expected to continue for several years.

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Bed Bugs in Hotels – The Problem is Getting More Notice from Guests

Bed Bugs in Hotels - The Problem is Getting More Notice from Guests
Bed Bugs in Hotels – The Problem is Getting More Notice from Guests

Over the Past few years, reports of bed bugs in hotels have received a great deal of media attention. Despite this fact, the hospitality industry is fighting an even greater battle with the public’s lack of general understanding regarding bed bugs.

Battling Public Misinformation

Researchers at the University of Kentucky recently conducted a survey to explore public perception of bed bugs in hotels. While 60 percent of respondents said they would move to a different hotel if they discovered evidence of bed bugs, no more than 25 percent would do the same with problems like smoky rooms or dirty linens.

Surprisingly, most respondents don’t know what bed bugs look like. When shown a “lineup” of five different insect pests, only 35 percent of business travelers and 28 percent of leisure travelers recognized the bed bug.

More than half the respondents said they would avoid a hotel that had a single online report of bed bugs. Jerrod M. Penn, PhD, lead author of the study, expressed concern at this finding, citing the unreliability of online reviews.

How Should Hotels Respond?

Wuyang Hu, PhD, senior author of the study, suggested a two-pronged approach to the issue:

  • Train hotel staffs to recognize bed bugs in the early stages.
  • Develop a reputation management plan to respond to online reviews as well as incidents within the hotel.

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