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  • Writer's pictureE.R.Cornwell

Past 5 Years... Hot Topics in Industrial Real Estate

Over the past five years, several topics have garnered significant attention and discussion in the field of industrial real estate. While it's challenging to pinpoint a single most widely discussed topic, the following are a few notable trends and themes that have emerged - these may not be the same going into the next five years, but they might provide a little insight on where the focus will be...

  1. E-commerce and Last-Mile Logistics: The rapid growth of e-commerce has led to increased demand for warehouse and distribution centers located near urban areas. Last-mile logistics, which focuses on delivering goods to the end customer, has been a crucial aspect of this trend. The need for strategically positioned industrial real estate to support efficient and timely deliveries has been widely discussed. We have seen an absolute increase in interest for these facilities across the industrial landscape and in every major market. A potential recession may cause larger distributors to shirink their footprint, but our guess is that they would lease any extra space out to other users versus lose the location.

  2. Automation and Technology: Industrial real estate has seen the integration of advanced technologies and automation, such as robotics, artificial intelligence, and the Internet of Things (IoT). These innovations have influenced the design and functionality of warehouses and manufacturing facilities, optimizing operations, improving productivity, and reducing costs. Although this does hold true for the largest of facilities, the cost to implement this technology is still outside the P&L of most small to mid-sized warehousers.

  3. Industrial Property Value Appreciation: The rising demand for industrial real estate, driven by e-commerce and logistics, has resulted in property value appreciation in many regions. Investors and developers have taken note of this trend, leading to discussions about investment opportunities, market dynamics, and potential risks. As we sit today, the subject of a US based recession across all industries is brought up daily. We believe that demand for all property types will see a pull-back in interest, however, industrial will remain the most in-demand because of its utility and consumer's buying habits post-pandemic.

  4. Adaptive Reuse and Repurposing: As the needs of industries change, there has been a focus on adaptive reuse and repurposing of existing industrial properties. Converting vacant factories or warehouses into mixed-use spaces, creative offices, or even residential units has gained attention. This approach helps revitalize underutilized properties and aligns with sustainability and urban revitalization goals. Our team has been involved with an adaptive reuse of an older mill building in an urban area for a few years now. We see the utility first-hand of properties like this as servicing not only small businesses, but also becoming creative space for artists of all types who may not have enough space in their home (i.e. no garage for a band, or attic for art space).

  5. Supply Chain Resilience: The COVID-19 pandemic highlighted the importance of supply chain resilience. Discussions in industrial real estate have centered around diversifying and strengthening supply chains, reassessing inventory management strategies, and reducing dependency on single-source suppliers. These discussions have led to increased interest in multi-modal transportation, regional distribution hubs, and flexible warehouse spaces.

Please note that the significance and popularity of these topics may vary depending on the region, industry, and time frame considered. It's always advisable to refer to more recent sources or industry publications to get the most up-to-date information on the current discussions in industrial real estate. Feel free to contact our team to discuss this or any other real estate related question you may have - we are happy to help! 480-951-1212 / info@cornwell.co

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