More than 780 million square feet of warehouse space will hit the market by the end of 2019, with developers and owners looking to take advantage of a 9.8 percent year-over-year annual growth rate in rents, according to Cushman & Wakefield’s latest North American Industrial Forecast Report.
Activity won’t be spread evenly across the country; just 10 markets will account for 42 percent of the total net absorption (655 million square feet) to be registered in North America through 2019. Three of those big markets are in the Midwest—Chicago, Indianapolis and Nashville, Tenn.—and the others are forecast to be the Inland Empire, Calif., Dallas, New Jersey, Toronto, the Pennsylvania distribution corridor, Atlanta and Phoenix.
Cushman & Wakefield’s findings are based on Moody Analytics data that indicate the market is being pumped up by online retailers’ demand for fulfillment operations space. E-commerce comprised less than 5 percent of North American new industrial leases just four years ago, and now that segment accounts for up to 22 percent.
