While many key market themes remain intact as they relate to the industrial real estate market, there are also some apparent changes as well, according to the recent edition of CBRE’s “Americas Industrial & Logistics Trends Report.”
The report’s data points, which are based on feedback from more than 950 CBRE brokerage and investment professionals, highlight the current state of the industrial real estate market, which continue to hit, or approach, all-time highs for certain benchmarks, including:
David Egan, CBRE head of industrial and logistics research in the Americas, told Logistics Management that the biggest takeaway is the first quarter decline in user demand in leasing across the Americas markets, specifically in the United States.
“It is low and noticeably lower than the numbers that came before it,” says Egan, “and it raises some red flags, with people wondering if it is an ominous sign for the state of the market. In fact, there isn’t a slowdown in users looking for space in the market. It has more to do with there not being much space left, and vacancy rates are so low that the ability to get a deal done is getting difficult.”
CBRE says the dominant users leasing space in most markets are in the e-commerce, 3PL and food & beverage markets. The needs for users in these markets, says Egan, are getting more diverse, with those three markets “dominating” demand in the industrial space.
Earlier in this cycle, from 2012-2014, most of their attention was focused on super big box facilities that were 500,000 square-feet and above and largely in major core markets like Chicago, Los Angeles, Dallas and Atlanta with big regional population centers.
“There is still plenty of activity happening in those types of buildings and markets, but we have seen a significant shift in the diversity of demand from those types of users from the major markets to secondary and tertiary markets, which are smaller and don’t have as big of population centers,” added Egan.