The industrial sector flourished in 2017. Real estate research firm Real Capital Analytics (RCA) noted in a recent report that the industrial sector, seeing gains from rising e-commerce sales and the resulting need for industrial facilities, was the only commercial real estate sector last year that saw an increase in transaction activity from January through November. NREI discussed possible trends to look out for in 2018 with several market observers.
1. Industrial activity will continue to thrive. There is no indication of a slowdown in this sector for 2018, says Peter Muoio, chief economist at Ten-X, an online real estate marketplace. During the latter part of 2017, new demand drivers, including e-retail warehouse distribution and fulfillment space, cloud computing and facilities for legalized cannabis, supported much of the demand in the segment. However, Muoio expects there to be an increased demand from traditional users of industrial space, such as industrial production companies. “You’re in a sweet spot for 2018 in the industrial segment,” he notes.