As a result, the U.S. vacancy rate is tightening rapidly. It fell to 7.5 % in the fourth quarter, down 80 basis points from a year ago and 330 basis points lower than its recent peak in first quarter 2010. “The overall vacancy rate has now declined for 13 consecutive quarters,” Morris says. “In the warehouse sector, vacancy has reached its lowest rate in five years, declining for 15 consecutive quarters. Strong demand Class A space has led to its short supply.”

The resulting upward pressure on rents brought the average direct asking rate to $5.92 per square foot in the fourth quarter of 2013, a 4.2 % year-over-year increase. Rents are still 13 % below their peak level achieved in 2008, but they have been inching up slowly since second quarter 2011.

Ultimately, these positive fundamentals have sparked a new wave of development. As the year came to a close, 79.4 million square feet of new industrial space was under construction, up 87 % compared to year-end 2012. New development is particularly strong in Inland Empire, Chicago, Dallas/Fort Worth, Houston, Central New Jersey and the PA I-81/I-78 Distribution Corridor. Each of these markets has four million square feet or more under construction.

“Ecommerce continues to drive demand for modern logistics facilities,” Morris says. “Online sales are anticipated to reach $370 billion by 2017, up from $231 billion in 2013, which will continue to benefit our sector. Traditional brick-and-mortar companies, like Home Depot and Walmart, also are playing a key role in the industrial development pipeline.”

Morris anticipates continued progress in 2014. “Less fiscal drag and reduced uncertainty should lead to stronger economic growth this year,” he says. “Considering that demand for industrial space has been consistently strong through the economic resurgence so far, it should remain so as the recovery becomes more robust.”