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Prologis, Inc. has published an in-depth analysis of the United States industrial real estate market in a paper titled “The Shape of the U.S. Industrial Recovery.”
In the report, the company’s research team points to a strengthening of the industrial market with the recovery transitioning into expansion. They believe this is driven by three key factors:
- Effective rents expected to rise 25% over next four years;
- Pent up demand: Exhibited by strong net absorption in the fourth quarter and high readings from Prologis’ proprietary Industrial Business Index survey of customer activity levels; and
- Broadening leasing velocity: Market tightness is supporting rent growth in more asset types, in more markets and in more locations in those markets
“The U.S. industrial cycle is clearly building on positive momentum and showing signs of expansion,” said Chris Caton, vice president and head, Prologis Research. “New construction starts remain low, demand is increasing, and the housing market and e-commerce are playing an increasingly larger role. We expect a broader uplift in the U.S. industrial property markets to occur for a period of time, and long-term outperformance particularly in infill locations in U.S. global markets.”
Prologis Research monitors, analyzes and reports on key trends and dynamics in both real estate and supply chain management to provide customers, investors and the general public with insight from a global and large-scale perspective.