Dive Brief:
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The recovering homebuilding industry has spurred an “incredible rebound” in the warehouse industry, according to industry experts who spoke to commercial real estate magazine National Real Estate Investor.
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The strong outlook for housing starts and sales means increased demand for big-box industrial space where building materials manufacturers and distributors can store the products before shipping and after receiving them, the article noted. In addition, many construction trades, like plumbers and cabinetmakers, operate out of warehouse industrial parks. And home-improvement chains and furniture stores will need additional warehouse space.
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Warehouses nationwide have a low vacancy rate of 6.7% after 19 consecutive quarters of declining vacancies. To meet a near-term boom in demand for space, the magazine said, most of the warehouses under construction now and over the next three years will be larger than 100,000 square feet, which will spike demand for smaller buildings.
Dive Insight:
There isn't enough new warehouse construction in the pipeline to fill the rising demand, which means building industry subcontractors, retailers and distributors are likely to pay higher rent for their warehouse space over the next few years, the magazine reported.
And the growth of e-commerce among home-improvement stores and building materials dealers will further propel the demand for warehouse space.