The IU Center for Real Estate Studies hosted a panel discussion titled Changes Ahead: Industrial Outlook and Trends at their fall luncheon, which took place in September at the Embassy Suites Plainfield. Sara Coers, Associate Director of the IU Center for Real Estate Studies and Lecturer in Real Estate at Kelley-Indianapolis curated and moderated the panel.
In the last few years, the rise in e-commerce and supply chain issues triggered by COVID-created market conditions led to a boom in industrial development, along with a flooding of capital into the industrial market.
As life has normalized post-pandemic, another re-shaping of the industrial market has begun. There are new product types, re-shoring and near-shoring efforts, and technological advances changing the industrial landscape, while persistent labor shortages, turmoil in the logistics industry, and shifts in user functionality needs have risen as barriers to success.
The panelists shed light on what’s trending in the industrial market both nationally and locally, as well as the changes and challenges that lie ahead.
Panelists were (pictured from left to right):
- Ian Nicolini, Vice President of Development, Pure Development
- Alex Cantu, Vice Chair Capital Markets Midwest, Colliers International
- Angie Wethington, Senior Director, Scannell Properties
- Danny Scheidler, Executive Vice President, Industrial Real Estate Solutions, JLL
- David Dunbar, Market Officer, Ambrose Property Group
Recent market reports indicate that industrial vacancies are high and net absorptions are anemic due to the exuberant development pipeline of 2021-2022. But planned construction slowed down substantially with the rise of interest rates. Panelists shared their thoughts on what the situation is today with absorbing this abundance of recently developed space and what is happening with users and their space needs and choices.
Panelists discussed what they are seeing on the development side of things and discussed new product types, like advanced manufacturing, which seem to be heating up as a result of the CHIPS Act and government initiatives.
With a more negative outlook for industrial being issued from Green Street and others, particularly in areas like Indianapolis, the panel examined how perceptions of the Midwest differ from what is actually happening in the Midwest. In addition to labor issues and supply chain issues being mentioned as persistent obstacles impacting industrial development, construction, and tenant businesses, the interest rate situation has also not helped. That said, industrial debt origination is up, and coming debt maturities do not show signs of atypical distress for the industrial sector.
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