SVN® International Corp. presents the 2024 State of the Market Report, giving insight into the industrial sector.
Driven by shifting consumer behaviors favoring online retailing, the US industrial sector’s robustness is evident. This demand surge has fueled the need for warehouse and distribution centers, particularly in proximity to population centers, to enhance delivery speed. While e-commerce sales surged dramatically during the pandemic, growth rates have since moderated with a 7.4% increase recorded in 2023. This trend is reflected in industrial real estate data, with net absorption declining significantly in 2023 compared to previous years, yet still showing signs of long-term stability as the market adjusts to a more normal pace.
Despite the recent slowdown in transaction volume and the rise in cap rates driven by market forces, the industrial sector remains resilient, experiencing a marginal increase in asset valuations in 2023. Industrial asset prices reached a new all-time high, underscoring the sector’s momentum and long-term optimism. While forecasts suggest a cooling trend in net absorption, economists highlight this as a return to normalcy rather than a negative outlook, emphasizing the sector’s enduring strength amid cyclical fluctuations.
Learn more about recent changes by clicking on the full report below!
