It's hardly multifamily, but industrial real estate has emergedas somewhat of a darling in its own right as the economy continuesstrengthening and performance drives up property values. Indeed,industrial markets around the country are bouncing back—and someare preparing for a bona fide boom.

The industrial landscape is being redefined by surging demandfrom e-commerce, traditional retailers, the manufacturing sectorand third-party logistics providers, according to Marcus &Millichap's National Industrial Research Report for the first halfof 2014. Beyond ports and intermodal hubs, market dynamics arepushing industrial real estate to secondary markets and eventertiary metros as US exports blow past their 2008 peak. US exportstotaled $2.3 trillion in 2013, according to the US Department ofCommerce.

A quick look at market stats magnifies the opportunities inindustrial. MMI predicts about 120 million square feet of newsupply is set to come on line in 2014. That's a whopping 61%increase over 2013. The good news is most of the product haspre-committed leases or is build-to-suit. And even with all the newsupply, MMI expects the national vacancy to hit a cyclical 7.1% lowby year-end with 239 million feet absorbed. Meanwhile, asking rentsrose by an average of 5.1% and concessions started melting away inthe first half of 2014.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.