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Top 10 Drivers of Industrial Real Estate Development

U.S. manufacturing is booming again, returning industrial capacity utilization back to historical averages. Vacancy rates are now below a cyclical low—falling 30 basis points in the second quarter and are predicted to end the year toward 7 percent. New construction is still catching up from the 50-year delivery low that occurred in 2010-2013, with approximately 120 million sq. ft. of new supply forecast to come online by the end of this year—an increase of 61 percent from the close of 2013—with much of it either build-to-suit or pre-leased. Rents are forecast to increase by 5.1 percent, with rent increases for newer assets and in gateway markets to exceed national averages.

But growing a business is more complicated than ever due to a number of factors. So, what’s driving industrial real estate development? We’ve examined the second quarter reports of six leading commercial real estate services firms to find out.

Sources: Cassidy Turley: “U.S. Industrial Trends Report 2nd Quarter 2014;” CBRE: “U.S. Industrial MarketView Q2 2014;” Colliers International: “Q2/ Industrial/ Research & Forecast Report”; JLL: “United States Industrial Outlook / Q2 / 2014:" Lee & Associates: “The Lee Industrial Brief Q2 2014;” Marcus & Millichap: “Special Industrial Research Report, First Half 2014.”

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