During the pandemic, industrial properties were probably the hottest ticket around. The need to distribute and sell products at physical arms-length, the sharp explosion e-commerce, the shutdowns of businesses — logistics, warehousing, and the development of distribution and storage were obvious tools to address the issues.

That led to a rush of demand and, as a result, increased supply, with almost 1.2 billion square feet in the U.S. created in the last two years. But as things have normalized, there's been an impact. As CBRE recently noted, things have begun to slow, as might have been expected, especially with higher interest rates.

"Total annual industrial leasing activity fell to 790 million sq. ft. in 2023 from a record 1 billion sq. ft. in 2021 and was not enough to offset the large amount of new supply," they wrote. "As a result, the overall industrial vacancy rate jumped by 180 basis points (bps) last year to 4.8%, returning to near its 10-year average of 4.7%. Developers predictably became more hesitant to break ground and construction starts fell to 46.3 million sq. ft. by Q4 2023 from a quarterly average of 102.5 million sq. ft. in 2022."