Industrial Real Estate Sector Enjoying Strong Year

Jack Rosenberg

In the latest episode of The REIT Report: NAREIT's Weekly Podcast, Jack Rosenberg, national director of logistics and transportation with Colliers, discussed some of the latest trends and developments in industrial real estate.

Colliers’ annual report on industrial real estate transactions in North America called 2016 one of the strongest years to date in the sector. Rosenberg noted that the growth in absorption of industrial space has been strong, which has been matched by healthy build-to-suit and speculative construction. According to Rosenberg, absorption and construction in the industrial sector have continued at strong paces in “almost all of the major markets across the country.”

“The demand has been so high that there are 60 million square feet under construction right now for future demand,” Rosenberg said. He pointed out that in 2011 speculative construction across North America amounted to just 600,000 square feet.

Demand drivers for industrial space include e-commerce and the prolonged economic expansion in the U.S., according to Rosenberg. Importantly, e-commerce requires different types of industrial space compared with standard distribution centers, which are designed to ship pallets of goods, he said. Rosenberg also noted companies are working to make their supply chains more efficient, boosting new industrial construction.

(Subscribe to the NAREIT Podcast via iTunes.)