When a company wants to build a new building for industrial use, it would typically start with the real estate manager and the supply chain manager meeting with the C suite to fund the project. During the pandemic they might well have gotten what they wanted. But now these executives are likely leaving that meeting empty-handed. The C suite mantra to these and many other requests is to avoid committing capital as much as possible.  'Come back with a plan B,' they are told. 

Jack Fraker, Global Head of Industrial & Logistics Capital Markets for Newmark, relayed this hypothetical example during a webinar held by GlobeSt.com last week and sponsored by JLL Technologies. It was a telling illustration of the state of demand for industrial product at the moment. The demand is there, clearly, but current financial conditions have made decision makers cautious about investing in both assets and additional space. "No one is building new buildings if they can get by with a slight delay," Fraker said. 

Newmark stats on third quarter activity also demonstrate this trend. Nationally, absorption measured 47 million square feet for the quarter, a solid if muted demand, Newmark said, with the volume approximately 15 million square feet less than 2019's quarterly average net absorption.