Despite headwinds, this soaring niche continues to attract an increasing number of investors. Industry experts expect substantial growth to continue, driven by increasing demand and need for temperature-controlled storage and transportation of food, pharmaceuticals and chemicals.
While outdoor storage has not been immune to headwinds facing commercial real estate of late, the IOS sector still boasts one of the lowest vacancy rates of any property type due to strong supply/demand fundamentals.
The single greatest amenity going forward in the logistics environment is going to be the availability of power. Although the moment where every warehouse or industrial space will be serviced by renewable power sources, it is predicted that the technology will likely appear faster than expected.
Rising development costs, whether from high land prices or increased construction costs, has led investors to shift away from evaluating sites based on historical lease prices and instead betting on the potential for rent growth that could be spurred by a lack of supply.
Supply-chain strategies remain center stage for industrial real estate developers, investors and advisers. At I.CON East, NAIOP’s annual East Coast industrial conference, experts outlined new best practices and answers to continuing challenges.