by Dan Rafter
Expect 2014 to be the year of the distribution center, at least according to Jones Lang LaSalle.
Jones Lang LaSalle recently released a report detailing the growing strength of the industrial market across the country, including in key Midwest markets. According to the company, industrial markets across the United States have been in recovery mode for more than four years. The market has enjoyed 15 consecutive quarters of positive net absorption.
And last year was a particularly good one for the industrial market. According to Jones Lang LaSalle, in 2013 the industrial market saw 168 million square feet of net absorption. The company forecasts that the market could hit 180 million square feet of net absorption by the time 2014 ends.
You can point to e-commerce and high demand as the driving force behind this industrial boom.
“2014 is starting off with high demand from e-commerce and other users who are in the market for large, sophisticated space, and lots of it,” said Craig Meyer, president of industrial brokerage at Jones Lang LaSalle, in a written statement. “Modern space with proximity to population centers and a robust logistics infrastructure will dominate the industrial real estate sector in 2014.”
Jones Lang LaSalle predicts that the industrial vacancy rate will fall to a low of 7.5 percent in 2014.
Why? Jones Lang LaSalle said that demand for industrial space is spreading into secondary markets, including, specifically cited in the report, Indianapolis.
Jones Lang LaSalle also said that developers and investors are focusing on markets that have solid intermodal infrastructure in place. Jones Lang LaSalle specifically mentions Columbus and Memphis as examples.