Date: 2015-09-10
Implication of e-commerce on the real estate market
Humans are tangible beings, and most of them enjoy moving around to engage in various tasks essential, unimportant, or damaging to life. So a monopolistic power exerted on a popular location gives the holder of the property a tremendous bargaining power in any normal circumstances. However, when a location is not popular anymore for whatever reason, the tide changes, because a monopoly over something not great is no longer valuable, while the bubble is probably there, already.
As the online companies kill the offline ones and thrive, we should expect to see many offline shops to disappear. As the yield on properties falls even further, we should expect many commercial properties to get bubblier and cheaper, eventually. However, offline marketing and offline shops are useful for the online players, too. The implication of this is:
The price gap between the prime and less prime ones widen.
Favorable for the F&B businesses, as retail shops are the ones that are most adversely affected.
Digression:
Possibility of a rapid increase in tele-commuting population needs to be considered in the long run.
This has an important implication on the labor market. Tech savvy ones can do much more than those who are not.
Date: 2018-02-27
Follow up (Link):
Starbucks comments on empty US storefronts