Supply of Warehouse Space Yet to Meet Demand
May 12, 2022
We’ve all been affected by the disruptions of global supply chains in some way, especially those of us who operate within the industrial sector of the corporate real estate industry. On paper the industrial market is in an extremely strong place; vacancies are at all-time lows and rents have been growing consistently across the board — with big 30+ percent year-over-year spikes in some coastal port cities. Institutional money is flowing without an end in sight, users continue to fill existing space, and the appetite for new product has never been so large. This is a byproduct of a global virus that accelerated and pulled forward a significant amount of e-commerce demand, therefore dragging along a significant amount of warehouse demand with it. But this momentum is a double-edged sword. As strong as the desire for new product has been, the very factors contributing to this strength are also working to suppress it.