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Over the last few years, bolstered by an unprecedented boom in e-commerce and retail sales, the industrial sector has posted historically high demand and supply growth. And that’s led some analysts to question how long the ride can last for the sector that’s relatively unaccustomed to such a meteoric rise. In short, some are wondering whether the current boom is a bubble or something more sustainable. 

A recent report from YardiMatrix predicts that retail sales, housing starts and personal income will all likely continue to grow at a rapid clip until the middle of the decade, which will allow industrial demand to “continue unabated” for at least a few more years. The firm’s forecast calls for an annual increase in total industrial stock of between 2 and 2.3% over the next five years, netting between 350 and 370 million square feet of new space each year for a total of 1.8 billion square feet of new stock. And while more than 290 million square feet has been added to the sector over the last three years, the predicted rise in space still may not be enough to meet demand.

 

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