Digging deeper into the changing dynamics in U.S. real estate, this slide looks at retail and industrial property trends. The chart on the right shows the change in the number of retail establishments over the last ten years. While total retail establishments are growing, service establishments are driving growth. In particular discount stores, personal care shops (nail salons, etc.), restaurants and bars are leading. Stores that sell clothing, electronic, appliances, furniture, and books are declining, as shoppers buy more online instead and focus on experiences in-person.
The chart on the right shows the growth in industrial establishments along with the steep drop in vacancy rates. Warehouse growth has picked up over the last five years as online shopping grows and retailers set up warehouses locally, closer to the end consumer. However, the next wave of industrial property growth is likely to be in data centers, highlighted in blue, as data becomes the preeminent commodity.