Survey rates impact of e-commerce.

Members of The Counselors of Real Estate, an association comprised of leaders in real property advisory services across the United States, rated the retail market as the most affected real estate market in the e-commerce boom in a 2000 survey. Members of the association were asked to rate the effect of e-commerce on several real estate markets in a new survey taken late in the first quarter of 2000. They called the industrial real estate market the second most affected.

Respondents ranked the effect of e-commerce on residential, commercial, hotel, office, industrial and retail markets. They ranked them on a scale of 1 to 5, with 5 being the greatest impact. The results included 2.99 for residential, 3.05 for hotel, 3.25 for industrial, 3.01 for commercial, 3.1 for office and 3.54 for retail.

While some respondents felt there won't be much difference in the retail market, others saw the effects of e-commerce playing a role in the retail real estate market. "Retail big box and malls will likely feel the bite from computer buying in U.S. retail shopping," said one respondent.

Others saw e-commerce helping and hurting. "It will be helped because e-commerce needs support and hurt because traditional demand will be displaced by online shopping," said another.

Industrial real estate was right behind retail on the scale, with a rating of 3.25. One respondent said this market segment is just beginning to "percolate."

The move in industrial seemed to hinge on the respondent's experience in warehousing for the just-in-time movement of goods. The feeling was that the warehouse serving e-commerce would be more technologically advanced, and smaller than previously, "high-tech distribution needs air- port proximity and more smaller warehouses," said one CRE.

Others agreed, "It is creating substantial demand for office and industrial spaces - all product types must be wired."

Yet a minority felt that the shift would be away from warehouses and industrial with the coming of more e-commerce, noting, "[E-commerce] shifts in demand downward for some of the common classes of commercial and industrial real estate."

Respondents ranked office space next on the scale. "Office space is being redefined to accommodate the technology requirements," said one CRE.

Other respondents remarked not only on the physical requirements that will be different with tomorrow's technology, but also felt that it will create a substantial demand for both office and industrial spaces. But even with the increased demand, the spaces will still need to be wired.

CRE's whose work is focused on the hotel market commented on the shift in this real estate market thanks to e-commerce. "Our company owns and manages hotels throughout the U.S.," said one respondent. "We're seeing a substantial increase in user sessions at our various hotel websites. We are also better able to micro manage our room inventory by adjusting rates to induce demand via e-commerce and market our distressed inventory via Priceline.com and lastminutetravel.com."

The respondents were less sure about how the commercial and residential real estate markets will be affected by e-commerce - opinions were divided. One noted, "E-commerce will impact the residential market in more numerous aspects than commerce, which is already years behind leveraging its advantages."