Industrial Update
The INDUSTRIAL
REVIVAL
With demand on the rise and little development in recent years, the nation’s
industrial market is undeniably making a comeback. Its prospects are even brighter.
By Brian Rogal
U.S. Industrial Cycle, by Market
The revival of the indus- trial market has become unmistakable and those
in the sector usually express
tremendous optimism about
the near future.
“We are seeing recovery
across all sizes of industrial
buildings,” says Chris Zubel,
who was recently named
managing director of CBRE’s
Chicago industrial group
and helps run the overall
Chicago operations. “We are
even starting to see specula-
tive construction, and that’s
something we haven’t seen
since 2007.”
The general wave of
revival has hit many core
markets, including Chicago,
Atlanta, the Inland Empire,
New Jersey and others, he adds. “Investors
are starting to take the vacant land that was
in their inventory and put up spec buildings;
industrial real estate is in a total recovery
mode.”
For example, in some Chicago submar-
kets, due to a combination of available land
and good transportation options, develop-
ers have started the speculative construction
of huge big-box distribution facilities that
encompass hundreds of thousands of square
feet. But even in older, denser submarkets
without much available land, developers
have started building smaller facilities on
spec. “That’s still significant because we
haven’t seen it for so long.”
Experts say several factors have driven
this growth. Most notably, the expansion of
e-commerce has sparked the need for big-
box distribution centers in major distribu-
tion hubs. “More than one-third of 2012
build-to-suit requirements were e-com-
merce related,” Prologis stated in a March
2013 report on the US industrial recovery.
According to the US Census Bureau, e-com-
merce sales totaled $225 billion in 2012,
more than double the amount in 2005.
