The Top Metros Fueling Demand
Industrial properties have been experiencing heightened demand in recent years with 277 million square feet of supply absorbed in 2019 alone. This demand is fueled by e-commerce, cold storage, and warehousing. When travel restrictions and stay-at-home orders were enacted nationwide, employers reacted by implementing teleworking abilities, which increased internet use substantially, feeding the need for secure data centers and additional e-commerce warehouse space.
Compared to other commercial real estate sectors, industrial boasts the most demand, even amidst a pandemic, with 200 million square feet of logistics space already added and a strong industrial supply expected to deliver by the end of 2020. The markets experiencing the most impressive demand are Orange County, the Inland Empire, Los Angeles, Atlanta, Dallas-Fort Worth, Phoenix, and Richmond, all of which shared similar attributes including business-friendly environments, proximity to population and jobs hubs, and increases in population.
While the outlook for industrial is still to be determined, the increasing e-commerce sales, grocery, food-related users, and other occupiers who supply essential businesses should sustain industrial use. The sector’s history of weathering economic storms leaves experts optimistic for the future.