Industrial REITs Boosted by Logistics Demand
September 12, 2018 | Sarah Borchersen-Keto
Industrial REITs own a variety of types of warehouse properties that support the global supply chain for the manufacture, storage, and shipment of goods. Of particular note is the rapid growth of logistics facilities used for the delivery of products bought on the internet.
Demand for logistics real estate has surged with the growth of e-commerce. Net absorption has been more than double over the past two years compared to the average pace of six years ago, according to data from CoStar. New facilities currently under construction equal 2 percent of the existing stock, a rapid pace of growth that is barely able to keep up with demand.
These favorable fundamentals have lifted occupancy rates of properties owned by industrial REITs to 96.9 percent, the highest among the REIT property types, according to the Nareit T-Tracker®. Occupancy has surged from 93 percent five years ago.
