Industrial Market Trends Point toward Promising Rebound as Weather Warms
COVID-19 provided unique challenges and opportunities to the industrial market in Q1. While tenants have seen their businesses change overnight, the overall industrial real estate market has also seen significant fluctuation. The vacancy rate sat at 6% in Q1 2020, and average rents dipped to $5.12 per square foot for warehouse and rose to $9.86 per square foot for office. The total absorption for Q1 came in at -326,836 square feet, below Q4’s total of 316,801 square feet. As the ramifications of COVID-19 took effect in late Q1, e-commerce and industrial markets giants, such as Amazon, Target and Walmart, saw booming sales. Manufacturing opportunities also arose in producing personal protective equipment and medical supplies. As global supply chains disintegrated due to the virus, firms gained interest in nearshoring future supply chains, which will provide opportunities in the industrial real estate sector.