The electric vehicle industry is set to fuel demand for industrial real estate for years to come, predicts CRE research firm YardiMatrix. And major automakers have announced plans to produce EVs or batteries since the US Inflation Reduction Act brought in the subsidies, which require that the vehicles be made mostly in the US.
The continued demand for industrial space is keeping market fundamentals healthy across the U.S. The national average rent for in-place leases stood at $7.12 per square foot in February, growing 6.9% over year-ago figures.
There are five multistory properties under construction right now with roughly 5.3M SF of industrial space combined that have no announced leases signed.
The temporary downturn will slow the rise in warehouse rates, but won’t send them into decline, as has happened in transport modes, according to analysts. They project the vacancy rate to creep up to 6% by the end of 2024, still tight by historical standards, and it should keep pushing pricing higher. CLICK ON THE HEADLINE FOR MORE
Although e-commerce-fueled bulk logistics space is the darling of the current cycle, manufacturing stimulates industrial space demand for both factories and warehouses. Investors seeking higher cap rates are finding them in industrial spaces serving manufacturing. CLICK ON THE HEADLINE FOR MORE