Industrial Demand Outpaces Supply

Demand for industrial development has exceeded expectations and industrial leasing activity remains strong. This is based on the 2022 Midwest Industrial Outlook reported by JLL.

Supply chain distribution and increased material costs are two construction challenges slowing industrial development even though there is high demand. Sam Newberg, research director with JLL noted “developers who have ordered their building materials ahead of time are the ones who will be able to get into the ground first. So it's sort of a race.”

According to the report, there is also an increase in the percentage (61%) of spec buildings that are preleased before construction is complete which is up from the past 7 year average (45%).

"The top developers include Scannell Properties, which developed more than 2 million square feet of industrial space — 43% being spec — between 2020 and 2021. Next in line is United Properties with 903,000 square feet, 91% of which was spec. Opus Group, Endeavor and WPT Capital round out the list with entirely speculative properties” reported by J.D. Duggan from Finance & Commerce.

It was also noted that several spec industrial developments are pushing farther out into areas such as the northwest corridor as metro areas are running out of space and vacancies are decreasing.

Read the full article online at Finance & Commerce.