US Industrial Prices Headed Up

CHICAGO—Speculative industrial projects have sprouted up across the US in the past few years as an economic recovery has slowly taken hold. In order to satisfy the growing demand for new distribution space, developers in the top 30 US markets have 94.6-million-square-feet of speculative construction underway, according to a new study by Avison Young. However, this new supply will take around 12 to 18 months to hit the market, keeping the nation’s supply of industrial assets constricted, pushing up prices for these in-demand products.

And by analyzing CoStar Group industrial statistics, the Toronto- and Chicago-based firm found that investment sales in the past three years matches the velocity in the three years prior to the onset of the recession. “During each of these periods there was approximately 1.4-billion-square-feet of sales recorded,” the firm found. “This translates to almost 11% of the total industrial inventory changing hands.”