Industrial construction is gaining momentum nationwide, but rising costs, infrastructure constraints and longer approval timelines are creating new challenges for developers. Here’s what the shifting landscape could mean for future warehouse supply.
Industrial real estate is showing renewed strength as tenant demand outpaced new supply for the first time since 2022. With vacancies beginning to decline and construction slowing, the market is moving toward a healthier balance despite continued regional disparities.
The small-bay industrial sector makes up more than half of U.S. industrial inventory, yet attracts less than a quarter of new development. That mismatch has intensified competition, driven up pricing, and squeezed margins, forcing investors to rethink how they create returns.
In Seven Supply Chain Predictions for 2024, the logistics development powerhouse makes some appropriately large-scale forecasts. And how did Prologis’s forecasts for 2023 fare? A bit mixed, but more right than wrong.