Industrial real estate has experienced a structural demand shift over the past 15 years, driven largely by the rise of ecommerce and changing supply chain needs, according to MetLife Investment Management. This shift elevated the importance of infill locations near population centers, strong highway access and newer building stock, all of which contributed to rent growth premiums through the 2010s. However, those premiums have now stabilized, suggesting infill assets may no longer consistently outperform regional distribution hubs this cycle.
Analysis of CMBS-backed properties shows location and building characteristics account for roughly one-third of rent levels, with the remainder driven by broader market dynamics and tenant factors. Looking ahead, performance will likely hinge less on traditional location advantages and more on technological adaptability, resilience to economic cycles and positioning within supply-constrained markets.
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