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INDUSTRIAL OUTLOOK: Despite Trade Uncertainty, E-Commerce to Continue Driving Distribution Property Growth in 2017

January 11, 2017

INDUSTRIAL OUTLOOK: Despite Trade Uncertainty, E-Commerce to Continue Driving Distribution Property Growth in 2017

Potential High Tide of Infrastructure Spending Could Lift All Boats in US Industrial Property Markets – Even Those Along the Muddy Mississippi

January 4, 2017 | By Randyl Drummer | CoStar

Industrial real estate’s unprecedented bull run is expected to continue well into 2017 as both importers and exporters continue to seek warehouse and distribution centers close to major seaports and inland hubs, while increasingly venturing out to secondary markets.

Fitch Ratings expects booming internet sales to support the current industrial property upcycle, with growing demand from e-tailers willing to pay a premium for efficient, well located fulfillment space versus the less efficient racking requirements of traditional warehouses and distribution centers.

With demand for industrial space continuing to exceed supply, retailers and other cargo interests should anticipate tight space, rising rents and fewer options in primary locations near seaports and inland hubs. Space is especially tight for the highest-quality Class A properties in those markets, forcing some shippers to consider class B locations. Alternatively, they will have to go farther out into adjacent markets to find the quality sites and structures they need.

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April 14, 2016

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