Some logistics occupiers, especially general merchandisers, e-commerce companies and home-improvement retailers, are cutting their space commitments. This is resulting in an uptick in sublease space, particularly for warehouses larger than 300,000 sq. ft.
Our analysis uncovers a more evolving understanding of how domestic production or onshoring influences the industrial real estate market. It challenges sector stakeholders to abandon broad-stroke assumptions and further examine the impacts of shifting trade dynamics on warehouse demand.
It is widely believed that Industrial real estate clusters along highways. We analyzed metro Atlanta, an important logistics hub serviced by multiple interstates and state highways, to test this hypothesis.
The industrial sector saw a 70-basis-point increase in availability in the first quarter. Nevertheless, availability should remain below historic norms for the foreseeable future, a fact that distinguishes industrial from most other property types.
Is every real estate deal unique? Or does each deal provide a point in a broader spatial pattern? To answer these questions, CBRE Econometric Advisors (CBRE EA) mapped all the industrial property sales in Southern California over the past two years and then applied geospatial analytics to identify trading patterns.
Products manufactured in the U.S., and the markets where they are manufactured, continues to evolve. Looking at how each metro’s share of U.S. manufacturing employment has changed since 2010 provides a glimpse into this evolution.
Extraordinary industrial tenant demand amid historically tight availability has forced price-conscious tenants to older, less functional assets, but now the picture is changing. Tenants whose leases are rolling over will have abundant, amenity-laden space options, further disadvantaging older, less functional properties.
The rise of importance of online sales has stimulated demand for last-mile facilities in urban areas, which are often limited in supply. Read CBRE EA's latest industrial viewpoint to see how rent is affected.
CBRE EA expects e-commerce to grow nearly 6% per year on average (adjusted for inflation) over the next decade, sustaining the tailwind for industrial assets. However, the e-commerce effect varies by location.
The rising share of e-commerce within retail has led to a prolonged period of high demand in the industrial sector. With industrial demand surging, can supply catch up? Read EA's latest industrial Viewpoint.
In partnership with EA’s co-founder, Professor Bill Wheaton from the MIT Center of Real Estate, we developed a new rent series that leverages a repeat rent methodology – the gold standard in economics. We hosted a webinar Thursday, Feb. 25, to dive into this new series and answer some of your questions.
A unique element of EA’s value stream is the management, improvement, and development of rent “price determination models” and the identification and evaluation of those rent inputs and resulting outputs on an ongoing basis. In partnership with EA’s founder, Professor Bill Wheaton from the MIT Center of Real Estate, we developed a new rent series that leverages a repeat rent methodology – the gold standard in economics. With the new methodology for capturing rent movements and a new bottom-up forecasting approach, we have become more flexible in data rendering and more reliable in capturing changes.
Trends in the industrial sector remained strong throughout 2020, as a surge in e-commerce spending helped to support warehousing demand during the COVID-19 pandemic. E-commerce spending increased over 30% throughout the year, gaining a significant share in the retail sector as concerns over the pandemic pushed shoppers online.
It was a tumultuous 2020 and high levels of COVID-19 infections mean that it will be a difficult start to 2021, but economic prospects for the rest of the year are bright. This will provide a much more supportive environment for real estate, but challenges remain.
Trends in the industrial sector remained healthy in the third quarter, as continued strength in e-commerce spending and rebounding economic activity helped to support warehousing demand. Going forward, EA expects that e-commerce activity will experience another surge in Q4 during the holiday season and will continue to maintain an elevated share of retail spending even as the economy recovers from the pandemic.
The slowdown in industrial activity was better than expected headed into the second quarter and underscores the sector's resiliency. E-commerce activity surged during Q2 and is likely to prevent severe declines in demand in upcoming quarters as businesses look to expand their online capabilities.
Preliminary data shows that availability continued to increase in the industrial market in the second quarter of 2020, rising to 7.6% from 7.3% in the previous quarter. This marks the largest quarter-to-quarter rise in availability since the end of 2009.
The industrial sector will not escape the current recession unscathed, but it will experience a quick recovery and an improved outlook in outer years. Shifts somewhat attributed to the pandemic, such as an increase in e-commerce, carry some positive implications for industrial demand, even once the pandemic subsides.
The current economic developments are going to have some noticeable negative effects on industrial real estate trends over the next couple of quarters. However, the industrial market should benefit in the short term as consumers shift more of their purchases online.
E-commerce is rapidly, and permanently, changing the logistics and supply chain market. At 15% of total retail sales (double what it was 5 years ago), e-commerce is expected to account for 39% of retail sales by 2030.
Real estate cap rates' decline alongside government interest rates over the past 30 years has buoyed returns, with property values at pace with inflation but property net income falling behind. If cap rates begin to rise, appreciation could vanish.
With a number of states and localities having legalized (or taken steps toward legalizing) recreational marijuana in the past few years, some are looking to Denver to gauge how the industry might affect their local industrial fundamentals. In a new report, we offer a roadmap to identifying opportunity in the market, based on observations of industry dynamics in Denver.
Every economic recession has its unique origins, but it can also usually be characterized by the macroeconomic scenario that sparked it. The three scenarios that typically cause recessions have unique impacts on individual markets and property types and are the key to understanding how your portfolio will weather recessions to come.