Proximity to labor will remain a key factor driving industrial occupiers' site selection decisions, according to a new analysis from Moody's Analytics CRE.

"One old adage continues to hold true: location, location, location," writes Moody's Senior Economist Ermengarde Jabir.  But now, a new refrain is leaping to the forefront: labor, labor, labor. While labor has always been vital to the CRE equation, the confluence of a tight labor market and inflation – which has caused prices for necessities, including food, housing, and gas to skyrocket – is underpinning the need for new warehouse/distribution properties to be located in close proximity to labor."

Jabir notes that developers and landlords are looking to balance land costs with the proximity to an "abundant" workforce for potential tenants, with developers telling Moody's that for every dollar spent on wages, an estimated $2 to $5 is spent on rent by tenants.