Resiliency

Industrial real estate exists in many forms, which is one reason why the asset class remains powerfully resilient. The following rationale supports this statement.

• e-Commerce has been a main aspect propelling industrial real estate property acquisition and development. Growth in the asset class accounted for much of the new build-to-suit projects, a formidable sign of investor and developer assurance in the asset class’s strength. Why the growth? The retail experience changed as more people shopped and made purchases online.  Prior to the pandemic, shoppers were spending less and less time shopping in brick-and-mortar stores for specialized products and every day consumer goods (e.g., food, clothing, household products, meal delivery service, etc.).  The pandemic only intensified the consumer behavior.  

• Consumer consumption, business-to-business sales and delivery time of goods will shape goods/product demand and that demand will continue to stimulate modern construction.

• Tenants will continue to increase their warehouse space and locations to reach customers as quickly as possible.

• In healthy economic times, industrial REITs outperform other real estate asset classes.

• Fulfillment and third-party logistics businesses have an increasing need for distribution centers that are within short transport distances of urban and suburban areas. Due to higher costs associated with an “ideal location”, choosing a market and industrial property are now business-vital resolves that lead to high-quality space in first-rate settings near urban centers.

In conclusion, economic condition may slow the rate of growth of industrial real estate usage and construction; however, it will not halt growth all together.  Entities involved in providing goods to consumers will continue to improve platforms for consumer ease of use, vary product and delivery speed to maintain and grow loyal consumerism and purchase or build-out modern industrial buildings to store, manufacture and distribute goods.