Last year the industrial asset class knocked it out of the park in terms of performance. Industry watchers hoping for a repeat will be disappointed, James Breeze, CBRE's senior director and global head of Industrial & Logistics Research told the audience at the GlobeSt.com INDUSTRIAL real estate event held this week in Scottsdale, AZ. "They just won't happen again." For instance, leasing activity is down 10% this year compared to 2021, he said. And there has been a noticeable decline in light industrial space leasing by smaller businesses that have been affected by the economic uncertainty. 

But that doesn't mean the asset class isn't well situated not only for the mild recession that Breeze and many other economists are expecting in 2023 but also for longer-term trends as well. And even if the halcyon days of 2021 are in the rearview mirror, the sector is still posting very strong activity, Breeze said. 

Leasing activity may be down 10% this year, but it is still up 36% compared to 2020. "We'll probably finish this year at 850 million square feet of leasing activity," Breeze said. Also, the average rent growth is close to 19% "and that is a record."