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Home » No Sign Of Slowdown For US Industrial Market In 2018
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No Sign Of Slowdown For US Industrial Market In 2018

February 1, 2018
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Los Angeles -Jan. 25, 2018 - The U.S. Industrial & Logistics market's long run of strong gains, which stretches back to 2010, shows no signs of abating in 2018 amid the continued growth of e-commerce, according to CBRE's 2018 U.S. Real Estate Market Outlook.

CBRE expects rents for U.S. warehouses and distribution centers, already at record levels, to continue rising this year at the same pace as prior years as the new supply of facilities lags voracious demand. That created a prolonged expansion for the industry that so far tallies 24 consecutive quarters of rent growth and 30 consecutive quarters of positive net absorption.

"The Industrial market, particularly in the U.S., is different from many other commercial real estate categories because the growth of e-commerce has triggered a permanent, structural change in demand for these properties," said Adam Mullen, CBRE Senior Managing Director and Americas Leader, Industrial & Logistics. "In some hot markets, we've reached the unusual stage of net absorption slowing because there simply aren't enough available properties to sustain it."

The sector's growth has attracted investors to the point that global institutional investors queried in CBRE's annual survey last year selected industrial real estate as their most preferred asset class. Even so, CBRE reports that capitalization rates for industrial real estate have stabilized, and the pricing gap between top-quality, Class A properties and Class B properties has narrowed.

"The strong, steady demand from e-commerce users in the U.S. has made the industrial sector into an attractive alternative for institutional investors and foreign capital," said Jack Fraker, CBRE Vice Chairman and Managing Director of Industrial & Logistics Capital Markets, the Americas. _- Given the record fundamentals and the imbalance between investors demand and limited offerings on the market, we expect investor interest to remain very strong throughout 2018."

CBRE foresees several nascent development trends starting to take root this year. Among them: Developer interest in constructing multistory warehouses in select urban sub market markets with few available properties, high land prices and rising lease rates. Eventually, factors such as automation and driverless trucks will influence industrial site selection, perhaps allowing for distribution centers to be built farther outside of population centers. But that phenomenon is more of a long-term factor.

More Info: https://researchgateway.cbre.com/Layouts/PublicReportAccess/Default.aspx?PUBID=6d5bb6cf-12b0-42db-8ced-54f9db3487a1

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