While some real estate investment trust (REIT) sectors have suffered over the past few years due to struggling economies and the pandemic, the industrial REIT sector has not. In fact, industrial real estate investments have enjoyed a steady increase in profitability over the last decade, and experts believe this trend will continue through 2022 and beyond.
Industrial Real Estate Vacancy Rates Continue to Decline
In an article recently published by The Motley Fool, industry experts explain how the robust industrial REIT sector has greatly benefited from online commerce, noting, “From 2014 to 2020, e-commerce sales rose 220% to a staggering $4.28 trillion in 2020.” While other commercial industry sectors, like office and physical retail spaces, have suffered under the quarantine and social distancing restrictions over the last few years, industrial spaces have thrived.
Even as the pandemic wanes, consumer love for the convenience of online shopping has not. Another interesting boon to the industrial REIT sector has come in the form of recent international supply chain issues. Manufacturers and business owners alike see the value in domestic production and local fulfillment centers. The result is steep competition for available industrial warehouse space.
Industrial Warehouse Rents Continue to Increase
As industrial warehouse vacancy declines, the principles of supply and demand tell us rents will proportionately increase. While some may worry about the sustainability of a competitive industrial real estate market, the article further notes, “e-commerce sales make up less than 20% of all retail sales today, meaning there is still huge potential for growth.” Even concerns for overdevelopment can be eased, as at present, construction of new industrial space is unable to keep up with demand.
Ultimately, the factors contributing to favorable industrial REIT conditions show no signs of slowing down over the foreseeable future.
Talk to an Experienced New York Real Estate Lawyer
If you're looking for dedicated and sophisticated legal guidance in matters concerning your industrial real estate investments, call the Law Offices of Melvin Monachan, PLLC today at 347-389-1682, or contact us online.