Availability of industrial space in the U.S. declined in the first quarter of 2016 to the lowest level since 2001 and rents remain on an upward trajectory, though new construction is poised to limit both trends over the next two years, according to CBRE Group, Inc.
Though the U.S. logistics industry has recovered unexpectedly well from the last recession, reaching record highs in occupancy and absorption, experts believe the growth in property rents and values will peak sometime this year.
Industrial and supply chain real estate occupiers and investors alike experienced a record-breaking year in 2015 and should expect this trend to continue well into 2016, according to a JLL logistics survey report. Strong demand for logistics facilities is expected to remain consistent globally during 2016. Rental growth is projected to continue across all markets of the world in 2016 and through 2017.
When the Panama Canal expansion finally debuts in Spring of 2016, it will open to a thriving market that remains hungry for new and efficient distribution center space in nearly every major U.S. market. Retailers and e-commerce companies are already investing in new and larger distribution and fulfillment centers as the U.S. supply chain evolves to meet changing consumer demand and service requirements; especially near key ports, transshipment points and large population centers.
Companies are heavily scrutinizing transportation costs in East Coast and West Coast seaports-and inland cities with strong transportation links-locating facilities in markets best able to serve established and emerging "megapolitan" areas in a quick, cost-effective manner, according to a report from CBRE Group entitled Transportation Cost Equivalence Line: East Coast vs. West Coast Ports.
The rise of e-commerce means that companies must re-think where and how they construct distribution facilities, says Bob Silverman of Jones Lang LaSalle. Silverman notes how other market trends also are impacting facility planning.
Goodman continues to invest in key logistics hubs across Europe, with the expansion of its activities at the Port of Hamburg, where it has acquired a 35,000-square-meter property in the Altenwerder Freight Village – one of Germany's main logistics hubs in the immediate vicinity of the container terminal. It also plans to develop 12,000 square meters of new logistics space at the 81,000-square-meter site.
Florida took a beating during the Great Recession. Like many of its Sun Belt peers, the prominent roles of real estate, tourism and financial services led to more than 650,000 jobs lost between 2007 and 2010. Many of the state’s largest metro areas remain thousands of jobs below their peak levels.