A healthier economic climate will be highly beneficial to the industrial sector. With online sales anticipated to reach $370 billion by 2017, up from $231 billion in 2013, the industrial real estate market will be a main beneficiary. Increased sales translate into greater demand for logistics facilities, tailored to the needs of e-commerce. The economic environment for the industrial real estate sector is expected to be the best since before the 2007-2009 recession. In addition, new supply chain configurations are changing the industrial landscape. Technological advances in fulfillment are affecting the demand for warehouse space, influencing not only building size requirements, but also the location and build-out of the facilities. Construction is ramping up with rising demand for high-quality, Class A warehouse/distribution space.
After the steep decline in output during the Great Recession and the loss of over 2.5 million jobs in the last 10 years, the U.S. manufacturing sector has been slowly recovering in recent quarters. The outlook is positive, but the comeback is looking much different from past decades.
Companies that will successfully produce in the U.S. will be focused on a more skilled workforce, access to distribution channels and highly automated processes. After peaking in second quarter 2010 at 7.7%, the national vacancy rate for manufacturing properties reached a five-year low of 5.9% in 2013.