Industrial warehouse demand set to take off

by Kelli Rogers10 Jul 2013
Lenders should pay attention to the growing demand for industrial warehouse space, an economist has said.
The demand for industrial warehouse space and modern distribution centers in the U.S. will continue to grow, although lenders must be aware of the specific pattern dictating growth, Colliers’ U.S. Chief Economist KC Conway told MPA. 
“There is another commercial real estate asset in the space that is now really healthy – industrial,” Conway said.  “Everybody herded into multifamily and is now anxious that it is overplayed. If they’re scrambling, industrial is now another attractive space in a long four or five year recovery.”
Over the last two years, Conway likens the North American industrial warehouse markets to baseball, saying the markets have pitched a “perfect game” through the eighth inning. The property type has seen eight successive quarters of declining vacancy rates, with net absorption outpacing new supply more than 2:1.
Conway said the U.S. is seeing growth for several specific reasons.

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