Colliers Conference: Industrial Becoming More Risk-Averse
Companies also face challenges related to the availability and cost of land.
Key trends such as migration, value engineering, and the Federal Reserve’s activity were featured at the recent Colliers’ 2023 National Industrial Conference.
KC Conway of Red Shoe Economics said that people relocating directly impacts industrial space demand and that e-commerce companies have become more risk averse as they shrink smaller square footage.
“Our ports remain strong, serving as vital hubs in the global supply chain,” Conway added.
Executives from PepsiCo, Veritiv and W.W. Grainger said industrial space must be optimized.
They said that some occupiers are exploring the option of building their own facilities, “but they face challenges related to the availability and cost of land,” according to the conference report. “Site selection plays a crucial role in this process, with the entire distribution network taken into consideration.”
The panel said selling older buildings to fund the construction of new, more efficient facilities has been a workable strategy.
“The focus is also on value-engineering tenant buildouts to maintain competitive lease rates and cost structures,” they said.
Speaker economist Dr. Marci Rossell said the Federal Reserve has avoided a “hard landing” because she’s not seeing a decrease in economic activity.
Current GDP numbers remain robust, hovering above 4.5%, according to Rossell.
Rossel also suggested that artificial intelligence is a potential solution to fill the skilled labor gap.