Demand and leasing rates are no longer red-hot, but the industrial real-estate sector is proving resilient
Companies from e-commerce retailers to third-party logistics providers are leasing less new warehouse space amid weak freight demand, high interest rates and shifting consumer spending.
But the industrial real-estate market hasn’t completely cooled off after three years of frenetic expansion. The amount of storage available remains historically tight, industry experts say. The industrial market is “starting to slow,” said Matt Dolly, research director of real-estate services firm Transwestern. “I’m not going to say the brakes are on, but the foot might be off the gas and maybe they’re in cruise control.” Companies rushed to add hundreds of millions of square feet of warehouse space from 2020 through 2022 to meet pandemic-driven e-commerce demand. Those decisions drove the nationwide vacancy rate down to nearly 3% as of late last year, and some markets such as Southern California were effectively full........ (view the full story via this link to the Wall Street Journal)