Market appears to be stabilizing even as online sales growth shows no signs of slowing
A nationwide shortage of warehouse space that drove a yearslong surge in rents is showing signs of easing, the chief executive of the biggest owner of U.S. industrial real estate said Tuesday.
Warehouse demand has outpaced new supply since the end of the recession, as economic growth picked up. Retailers also stepped up leasing as online orders rose. The cost of renting space has soared, particularly in urban areas such as Los Angeles and Seattle, where less than 5% of total warehouse capacity is available for leasing, according to CBRE Group Inc.
At the end of last year, supply began to catch up with demand, said Hamid Moghadam, chairman and chief executive of Prologis Inc., in an interview.
“New construction has been relatively disciplined, so the market is much stronger,” Mr. Moghadam said in an interview. “Now we are getting into the more mature part of the cycle. It’s more of a balanced market, with modest rental growth.”
Read the full article in the WSJ.com here.