Dive Brief:

• Construction of light industrial properties is not keeping up with demand, pushing rents for existing buildings between 100,000 and 300,000 feet up by 5.7% over the past year, according to CoStar, a commercial real estate information provider.

• Light industrial businesses typically are less capital intensive and manufacture lighter, more consumer-oriented products — like clothing, furniture and home electronics — than heavy industries like shipbuilding, which need larger manufacturing and warehouse space.

• Rent growth for buildings housing light industries outpaced all other property types, including logistics buildings, whose rents grew at a rate of 5.4% year over year; offices, which saw a 4% rent spike; and apartments, with increases averaging 3.9%, Costar reported.

Dive Insight:

While construction of oversized warehouses and distribution centers for online retail giants like Amazon has been attracting most of the attention of investors, building in the light-industrial sector “has quietly emerged as the sleeper in today’s red-hot industrial market,” CoStar reported.

"It’s very unusual for industrial to post this kind of rent growth and beat out the office and multifamily sectors," said CoStar’s director of research, Rene Circ, who noted that light industrial rent is growing at three times its historical average.

Yet despite low vacancy rates for light-industrial properties, little new space is under construction. "Development is just not keeping up," Circ said. "Given how low vacancies are, we’ve been expecting vacancies to start tilting up a little bit and developers to catch up and build more than the market can absorb. That’s not going to be the case the way it looks this year."

By the end of 2015, CoStar predicted, light industrial will see an additional 6.1% rent increase, making new construction in the sector next year “a necessity.”