The spillover effect of E-commerce on local retail real estate markets

Using retail property transaction data and e-retailers’ fulfillment center openings from 2010 to 2014, we find that e-commerce expansion–measured by e-retailers’ fulfillment center openings–increases retail property values by 5.2% in counties with fulfillment center openings compared to similar counties with no openings. The effect appears in year two following the fulfillment center opening and persists through year five. This indicates a persistent divergence in retail property prices between the treatment and control groups. The increase in retail property values is accompanied by a significant boost in employment, wages, and business establishments in the transportation and warehousing sector, supporting the income channel hypothesis. However, we find limited evidence for the substitution channels. Notably, the impact is more pronounced in areas where fulfillment center workers are likely to reside.