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.
All through the pandemic, industrial properties have been among the most desired by commercial real estate investors. But in the current market environment, are industrial assets holding up just as well? Following another bump in interest rates and continuing economic uncertainty, overall industrial deal volume in the U.S. fell 18 percent year-over-year in the third
Industrial real estate has been the standout sector in real estate for close to a decade, and the pandemic only further entrenched its position. While other sectors of the economy ground to a virtual halt, consumers’ accelerated shift toward e-commerce made industrial one of the few assets to benefit from lockdowns and social distancing.
Renters of industrial properties are facing sticker shock in the current inflationary environment, with national effective rent growth expected to increase nearly 23% year over year in 2022. “Although industrial has a reputation for shorter lease terms, the reality is that the weighted average lease term for industrial is around five to seven years, much
Neither ongoing international trade disputes, nor the warning signs of a potential recession, nor the uncertainty that’s emanating from a particularly fraught U.S. presidential election year are enough to dim the enthusiasm for the industrial real estate sector, according to the findings in NREI’s sixth annual study.