BOSTON—The general outlook for leasing in the industrial sector continues to be “very positive,” CEO Ben Butcher of Stag Industrial said Tuesday on a first-quarter conference call. Speaking for his Boston-based REIT as well as the sector on a macro basis, Butcher noted that “net absorption is expected to continue to be dramatically higher than the supply.” STAG's own leasing activity was “significant” throughout Q1, he said.

Driving that positive outlook is a continuation of trends the sector experienced in 2013. “Continued general economic improvement, shortening and flattening the supply chains,” as well as an “onslaught of manufacturing” will continue to drive demand for industrial space over the next couple of years, Butcher said. “Even even some moderate slowing of the economic growth will not change the generally positive outlook.”

In recent months, Butcher noted, “the potential for oversupply has begun to creep into some specific market commentary—Dallas, Houston and Southern California in particular. These are markets where we're generally not active and to the extent we are active, it would be in product where we would have a significant cost utility advantage on the new spectrum of product.”