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E-Commerce Growth Creates Demand For Warehouse Workers

Jeremy Ballenger, Jessica Ostermick and Tyler Carner are partners in CBRE Colorado's Industrial & Logistics division.

The rapid growth of e-commerce is increasing the demand for warehouse workers not only in Denver but across the United States.

Denver saw a 20.6% increase in its transportation and warehouse employment population from 2013 to 2017, the equivalent of 9,550 new workers. It was the fourth-highest growth rate among the regional second-tier industrial and logistics markets studied in the CBRE Research report The U.S. Supply Chain Quandary: Finding Enough Workers For An Expanding I&L Sector.

In an effort to keep up with their tenants’ demand for labor, and the desire to be closer to customers, industrial developers have been building projects closer to the city in recent years than they have in the past. They are developing projects in the northern and eastern areas of metro Denver, where housing developments are popping up at a rapid rate to keep pace with the expanding population.

Brookwood Capital's newly built Smith Road Commerce Center in northeast metro Denver is a good example of the region's expanding warehouse and distribution sector.

“If you think back 20 years or so ago, a lot of the industrial development that happened was done way out in the burbs and not connected to residential development or other large projects,” CBRE Industrial & Logistics Director Jessica Ostermick said. “It’s starting to shift because distribution centers want to be close to the population centers because it allows them to get their products there faster.”

Denver’s total transportation and warehouse employment reached 56,000 in 2017, which represents 3.9% of total market employment. California's Central Valley led the second-tier markets for growth with a 45.7% increase over the same five-year span, followed by Indianapolis at 23.3% and Columbus, Ohio, at 21.6%.

“We hear labor come up more in conversation as a concern or something that tenants are looking at to help make decisions about where to locate,” Ostermick said. “People ask questions about labor availability and is one part of town better than another.”

Related Topics: Jessica Ostermick, CBRE Colorado