Good news for spec warehouse construction: the battle between supply and demand in industrial has tipped in the favor of developers. According to new research of 23 key markets from Newmark, tenants can’t get enough of new warehouses and developers are having a hard time getting spec construction wrapped up and delivered. That means notably short times between delivery and stabilization.

Three dynamics are governing spec construction and stabilization in new warehouses of 100,000 sq. ft. or larger. First, spec delivery fell sharply and was significantly under the levels of every year since at least 2015. Developers are feeling the pinch of a series of issues. “Speculative construction deliveries fell significantly in 2021 with developers citing pandemic-related labor disruptions, sourcing materials, lengthening entitlement periods, and community pushback to warehouse development as the primary causes,” the report stated.

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