E-commerce remains the industrial sector’s catalyst for success as retailers and developers strive to perfect the supply chain.
Online giants such as Amazon are impacting market dynamics in terms of scale and location with their demand for large distribution/fulfillment facilities near urban centers, resulting in rising land and development costs amid dwindling supply of developable land.
The largest U.S. markets remained extremely healthy and landlord-favorable while emerging markets in the South and West registered wide-ranging development and leasing growth during the past 12 months.
The average U.S. industrial vacancy rate was unchanged at 5% compared with one year earlier.
Despite the strong leasing market indicators, the lack of vacant and available space limited growth opportunities; as a result, net absorption was down 19% year-over-year to 195 million square feet.
Investment volume climbed to $54.9 billion in the 12 months ending in first quarter 2019, compared with $50.5 billion for the prior 12 months with demand for product surging and many new entrants trying to get a foothold in the asset class.