Click here to view with images.
To ensure delivery to your inbox, please add CBREAmericasResearch@cbre.com to your address book.
 
U.S. MARKETFLASH
Annual Industrial Demand to Hit 333 Million Sq. Ft. by 2022
June 26, 2020

Fueled by e-commerce growth, annual net industrial absorption will total more than 333 million sq. ft. by 2022, leading to annual rent growth of 5.7%, according to the latest CBRE estimates. This is more than triple the previously forecast demand based on new metrics that CBRE Economic Advisors (CBRE EA) has developed using e-commerce data.

In the COVID-19 era, e-commerce is fueling industrial demand more than ever, so basing forecasts solely on traditional employment-based metrics is no longer enough. By incorporating e-commerce data into its industrial forecasting models beginning in Q1 2020, CBRE EA is now able to more precisely forecast industrial rent, availability, absorption and construction.

The COVID-19 pandemic has resulted in significant gains in e-commerce’s share of total retail sales, which should further stimulate industrial demand and provide a short-term buffer to a more severe economic downturn.

The Census Bureau reports that while every other major category of retail spending declined, nonstore retail sales rose by 9.5% in April and by 9.0% in May. Nonstore’s share of total retail sales jumped to 19.2% from 15.0% in April, illustrating e-commerce’s prominence during the pandemic. Although this share fell slightly in May when many traditional retail stores reopened, it remained considerably higher than before the pandemic.
Figure 1: Online Sales Metrics | % of Total Retail Sales & Food Services

Source: CBRE Research, Q1 2020.

In its Q1 2020 forecast, CBRE EA assumes that much of the gain in e-commerce’s share will remain in the post-pandemic economy and online shopping will continue to gain additional share at a more normal pace. This has important implications for industrial real estate demand over the long-term and will contribute to strong absorption.
Figure 2: Industrial Rent Forecast

Source: CBRE Research, Q1 2020.
Contacts
Richard Barkham, Ph.D., MRICS
Global Chief Economist & Head of Americas Research
CBRE Americas and Global Research
+1 617 912 5215
richard.barkham@cbre.com | LinkedIn | Twitter
Spencer Levy
Chairman & Senior Economic Advisor
CBRE Americas Research
+1 617 912 5236
spencer.levy@cbre.com | LinkedIn | Twitter
James Breeze
Senior Director
Global Head of Industrial & Logistics Research
+1 602 735 1939
james.breeze@cbre.com | LinkedIn | Twitter
Ibrahiim Bayaan
Economist
+1 404 504 7900
ibrahiim.bayaan@cbre.com | LinkedIn | Twitter
Matthew Walaszek
Associate Director
Industrial & Logistics Research
+1 312 297 7686
matthew.walaszek@cbre.com | LinkedIn | Twitter
John Morris
Executive Managing Director
Americas Industrial & Logistics Leader
+1 630 573 7020
john.morris1@cbre.com | LinkedIn | Twitter
LinkedIn
Twitter
Facebook
CBRE Research
Unsubscribe

 You may also unsubscribe by calling toll-free +1 877 CBRE 330 (+1 877 227 3330).

Please consider the environment before printing this email.

CBRE respects your privacy. A copy of our Privacy Policy is available online. For California Residents, our California Privacy Notice is available here. If you have questions or concerns about our compliance with this policy, please email PrivacyAdministrator@cbre.com or write to Attn: Marketing Department, Privacy Administrator, CBRE, 200 Park Ave. 19-22 Floors, New York, NY 10166.

Address: 2100 McKinney Ave Suite 700, Dallas TX 75201

© 2024 CBRE Statistics contained herein may represent a different data set than that used to generate National Vacancy and Availability Index statistics published by CBRE Corporate Communications or CBRE's research and econometric forecasting unit, CBRE Econometric Advisors. Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the market. This information is designed exclusively for use by CBRE clients, and cannot be reproduced without prior written permission of CBRE.

CBRE and the CBRE logo are service marks of CBRE, Inc. All other marks displayed on this document are the property of their respective owners, and the use of such logos does not imply any affiliation with or endorsement of CBRE.

Photos herein are the property of their respective owners. Use of these images without the express written consent of the owner is prohibited.

 
All of CBRE's COVID-19 related materials have been developed with information from the World Health Organization, the Centers for Disease Control & Prevention (and similar global organizations), public health experts, industrial hygienists, and global subject matter experts across CBRE and our strategic suppliers. Our materials may not be suitable for application to all facilities or situations.

Ultimately, occupiers and landlords must make and implement their own reopening decisions for their individual stakeholders and facilities. CBRE's guidance is intended to help facilitate those discussions and expedite the implementation of those decisions once made by the client. We make no representations or warranties regarding the accuracy or completeness of these materials. CBRE cannot ensure safety and disclaims all liability arising from use of these materials.