Yardi Matrix report details industrial sector's strength

A new market analysis compiled by Yardi^® Matrix reports that the industrial sector of the U.S. economy is performing solidly. Warehouse and distribution assets posted double-digit total returns, record low vacancy rates and all-time high rents in 2017 and are on track for an even stronger year in 2018, according to the report.

The report, titled "Hitting Its Stride," details how rising e-commerce sales and online retailers' focus on moving closer to customers have made warehouse space popular with both investors and tenants.

Biopharmaceutical companies, whose growth potential and long-term returns have drawn increasing investment attention, are seeking new locations away from such traditional centers as Boston, San Francisco and Seattle. Meanwhile, rising imports, expanded Panama Canal capacity and larger cargo ships have driven up demand for industrial space at U.S. seaports. These and other factors "prompted a number of architects to design [warehouses] upward instead of outward," the report says, and inspired new designs to accommodate direct consumer delivery, refrigeration, vertical development and sustainability.

The report, which can be downloaded here, also includes a Q&A with Jim Connor, chairman and CEO of industrial asset owner and operator Duke Realty Corp.

The Architectural Billings Index measures the general sentiment of U.S. architecture firms about the health of the construction market by measuring 1) design billings and 2) design contracts. Any score above 50 means that, among the architecture firms surveyed, more firms than not reported seeing increases in design work vs. the previous month.