Executive Briefings

Trends in Industrial Real-Estate

Strength is returning to the market for mid-sized warehouses, though vacancies remain high for facilities of 100,000 to 200,000 square feet, says Rob Wheeler, vice president for industrial services at Cresa Chicago. Cresa Chicago is a real estate firm that works only with tenants. With 55 offices in North America, it is "the biggest real estate firm you've never heard of," Wheeler says.

The latter part of the last decade saw a bubble in industrial real estate, similar to what occurred in the residential market, though to a smaller extent, Wheeler says. "There was a lot of speculative building going on and a lot of big warehouses sat vacant for quite some time," he says. Landlords were eager to fill these spaces and aggressive pricing helped with the absorption that has taken place, he says.

A number of changes in the market have occurred since the bubble burst, says Wheeler. "The economic turmoil of the last few years has made companies re-evaluate their distribution networks. Many companies are moving toward more, smaller distribution centers," he says, noting that this trend has been strengthened by rising fuel prices.

Additionally, more companies are starting to question whether it makes sense to continue manufacturing overseas, says Wheeler. "We already are seeing some firms begin to shift manufacturing back to North America and I think we will continue to see that over the next few years. It certainly will continue to be a topic of discussion."

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Keywords: Aberdeen Group, Facility Location Planning, Network Design, Supply Chain Analysis & Consulting, Environmental, Logistics, Global Supply Chain Management, industrial real estate bubble, commercial real estate coming back

The latter part of the last decade saw a bubble in industrial real estate, similar to what occurred in the residential market, though to a smaller extent, Wheeler says. "There was a lot of speculative building going on and a lot of big warehouses sat vacant for quite some time," he says. Landlords were eager to fill these spaces and aggressive pricing helped with the absorption that has taken place, he says.

A number of changes in the market have occurred since the bubble burst, says Wheeler. "The economic turmoil of the last few years has made companies re-evaluate their distribution networks. Many companies are moving toward more, smaller distribution centers," he says, noting that this trend has been strengthened by rising fuel prices.

Additionally, more companies are starting to question whether it makes sense to continue manufacturing overseas, says Wheeler. "We already are seeing some firms begin to shift manufacturing back to North America and I think we will continue to see that over the next few years. It certainly will continue to be a topic of discussion."

To view video in its entirety, click here


Keywords: Aberdeen Group, Facility Location Planning, Network Design, Supply Chain Analysis & Consulting, Environmental, Logistics, Global Supply Chain Management, industrial real estate bubble, commercial real estate coming back