Will industrial market hit a tipping point with supply, demand this year? - Phoenix Business Journal

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Industrial sublease inventory has grown in recent months, prompting questions of whether the warehouse market is in for a correction as economic headwinds, higher cost of capital and overall uncertainty challenge the industry.

Meanwhile, industrial sublease inventory has grown in recent months, prompting questions of whether the warehouse market is in for a correction as economic headwinds, higher cost of capital and overall uncertainty challenge the industry., director and head of industrial research for the Americas at Cushman and Wakefield PLC , said industrial leasing has slowed significantly in recent months, especially compared to 2021.

"That flooded the market," she continued."Our absorption was in the red. I do not foresee that happening for us at this point ... a touch of oversupply is definitely possible toward the end of the year, however ... we’re definitely in a better place fundamentally." "The record number of facilities under construction in 2022 will result in record deliveries in 2023," Ortiz said."The pandemic fueled unprecedented demand for industrial space, with many companies taking on additional space to satisfy a 'just-in-case' inventory strategy. With waning demand, companies realized that they overestimated the amount of industrial space they needed, thus an increase in available sublease space.

Because interest rates have hiked so quickly, and aggressively, developers that had tied up sites and were looking for equity partners have been having trouble finding those partners because of congestion in the debt markets, Foster said.

 

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