JUNE 4, 2019

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New Deloitte data finds that industrial real estate’s golden run is ending

by Released

Industrial real estate — warehouses, distribution centers, flex spaces, and other industrial buildings with storage facilities — is one of the few traditional property sectors that has sustained demand in the past five years, earning it golden child status. But according to a new forecast published by the Deloitte Center for Financial Services, it may not be easy to sustain this momentum over the next few years. Potential shifts in the marketplace, including growing e-commerce demand, market oversupply, rising interest rates, and a higher cost of capital, will likely result in a slower pace of growth for this sector.

Key predictions include:

Industrial real estate demand will increase by 850 million square feet to 14.8 billion square feet by 2023. A 15 percent annual growth rate in e-commerce sales will be a
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