The amount of industrial properties 100,000 square feet or more in size within 30 minutes of ports is at record levels. The reason is economic. Developers wanted to appeal to large companies with strong credit and such companies typically are looking for bigger facilities.
The global forces affecting logistics real estate include less volatility, consumer service levels fueling demand and contracting new building deliveries.
If this trend continues, it could change the type of industrial space tenants require and the regions that see the greatest demand.
A supply chain crisis and severe labor shortages are creating mega challenges for developers—but industrial projects are pushing through. Demand for industrial space is so strong, and as a result the asset class remains “unencumbered” by labor shortages, according to Louis Archambault, an attorney at Saul Ewing Arnstein & Lehr.
Landlords of warehouse and distribution properties may look to shorter leases to capitalize on burgeoning e-commerce-driven demand, with the pace at which average lease terms are shortening picking up major speed. A new analysis from Moody’s Analytics notes that pricing and fundamentals of the sector never decreased as a result of the pandemic, and instead