Over the next couple of years, we expect industrial to remain one of the leading product types to watch.
The forecast for North American industrial absorption in 2020-2021 is a healthy 459.9 msf. Economic indicators, with strong links to industrial fundamentals, point to continued growth in 2020 and 2021. Industrial has been the investors’ darling in recent years, and there is no indication of this love affair coming to an end any time soon. Over the next couple of years, we expect it to remain one of the leading product types to watch:
- Supply levels are projected to reach 573.4 msf from 2020 to 2021. Nonetheless, vacancy will remain anchored around the 5% mark.
- Asking rents are expected to increase by 6.8% and reach a new nominal high of USD $6.95 psf by year-end 2021.
- Trade policy remains the most fluid aspect of the near-term outlook. The ratification of USMCA in the U.S. and the agreement on a Phase One deal between the U.S. and China are positive developments.
- We expect underlying industrial market liquidity to continue to grow as investors seek to deploy record levels of capital with an increasingly favorable allocation directed towards industrial assets.