Demand for Industrial Space Projected to
Top 250 Million Sq. Ft. in 2014
NAIOP Report Says Warehouse, Manufacturing Absorption
Will Flirt With Record Levels in 2014 as E-Commerce, Housing Construction
Expand
As major retailers and e-commerce firms such as Amazon.com continue to ramp
up their distribution and fulfillment networks they are expected to be joined
by building materials, appliances and furniture companies expanding their
capacity as housing construction resumes in a strengthening economy. As a result,
demand for warehouse and other industrial properties is expected to spike in
2014, according to a forecast released this week by the NAIOP Research
Foundation.
"Demand
for all types of industrial space -- warehouse, fulfillment-distribution
centers, manufacturing and flex -- is robust," noted Thomas J. Bisacquino,
president/CEO of NAIOP. "An intense increase in e-commerce has steepened
the demand for distribution and fulfillment centers, and companies are gobbling
up space as a result."
New
housing starts were up 18% in 2013, and construction growth will likely
continue as household formation rises and existing inventory is absorbed.
Meanwhile,
the falling U.S. jobless rate and increased spending power for families is
fueling gains in retail sales, which reached another record high in December
2013. Historically, rising retail sales has driven demand for retail space in shopping
centers and malls. In the current cycle, demand for distribution and fulfillment
centers will only increase as consumers purchase items online rather than
traditional bricks-and-mortar stores.
"The
combined forces of these two trends likely will result in continued growth in
demand for warehousing and distribution facilities, specifically from the
retail trade and housing construction sectors," Guirguis and Harris said
in their report.
