by Dan Rafter
Expect the North American industrial real estate market to continue its hot streak through 2017.
That’s the takeaway from Cushman & Wakefield’s recently released 2015-2017 industrial real estate forecast.
“Strengthening fundamentals throughout North America support a positive forecast for the next three years,” Said Maria Sicola, head of Cushman & Wakefield’s Research for the Americas group. “We expect economic conditions to drive further improvement and growth in the industrial real estate sector.”
Part of the reason for industrial’s predicted strong performance? Businesses are hiring again, with job growth set to top 3 million in 2015.
“Trends in supply and demand are favorable in across all major and secondary markets, with an overall decline in vacancy,” said John Morris, leader of Cushman & Wakefield’s Industrial Services for the Americas.
The rise of e-commerce has been an important factor in the industrial market’s strength, too, according to Cushman & Wakefield. Retailers are now using distribution centers to fulfill orders. And instead of fulfilling online orders from hundreds of miles away, retailers such as Walmart and Best Buy are routing orders to nearby outlets.
Online busines-to-business transactions are expected to rise in 2015 and beyond, too. Cushman points to a 2014 Forrester Research study that found that 89 percent of B2B providers have added e-commerce to their businesses.
These trends mean that the warehouse sector has posted 19 consecutive quarters of declining vacancies, with the sector’s vacancy rate now standing at 6.7 percent across the nation. Cushman & Wakefield predicts that the vacancy rate in warehouse will fall to 6.3 percent nationally in 2015.