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In some cities, surging demand has helped set off a speculative-building boom unlike anything in recent memory. In the first three months of the year, warehouse developers in the Chicago area broke ground on more speculative projects than in any quarter during the past two decades, according to Ryan Bain, a vice president at CBRE Group. There are currently 28 warehouse users in the market for 18 million square feet of space, triple the available supply, Bain said.
E-commerce alone is responsible for 20 percent of the current demand, according to Eric Frankel, an analyst at Green Street Advisors, helping to drive the spike in construction despite retail sales growth that has been slower than in previous economic expansions. Space close to population centers has become an especially hot commodity as startups compete for space with such shippers as FedEx and traditional retailers like Macy’s pursue the dream of same-day delivery.
Much of the warehouse craze is a reaction to a single player. Amazon has built a massive network of distribution centers as the muscle behind its reeducation of the American consumer.
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