Insight

Industrial Sector Poised for More Growth in 2014

November 13, 2013

The industrial sector is projected to lead commercial real estate in both investment and development potential in 2014, according to PWC/Urban Land Institute’s Emerging Trends in Real Estate 2014. The report aggregates perspectives from more than 1,000 commercial real estate industry professionals who participated in PWC/ULI's annual survey.

Healthy expansion of e-commerce distribution facilities will fuel growth in the warehouse subsector. Warehouses garnered the most interest from respondents with nearly 64 percent recommending to buy, and 27 percent recommending to hold these assets. Other subsectors such as self-storage, data centers, and research and development facilities are all expected to improve next year as well.

“Electronic retailing is impacting the whole distribution program,” says a logistics executive. “Facilities are being built to enable same-day delivery -– huge buildings, fulfillment centers in areas where we've never seen warehouses before.”

The industrial sector is also benefiting from the “reshoring” of expat factories. As companies make shortening their supply chain a key objective, dozens of corporations are reestablishing their facilities stateside due to rising labor costs and long supply chains in China, according to the report.

More than 60 percent of respondents listed Miami as the top city to buy industrial properties, followed by Houston, Seattle, Los Angeles, and Dallas respectively.

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