After years of supportive tailwinds, industrial real estate may face some headwinds in the year ahead.

“The industrial sector has thrived for many years, and this trend is expected to continue. That said, as 2022 wraps up, we expect to face some challenges and uncertainties within the market in the next year,” says Tyler Mattox, principal at MCA Realty.

Among the challenges, Mattox notes, are a potential recession and a return to more normal levels of ecommerce demand as customers once again embrace brick-and-mortar shopping post-pandemic.

“We expect transactional volume to continue to decrease in 2023, given the turbulence in the capital markets,” Mattox adds.

According to Mattox, while investor appetite for industrial real estate remains historically strong, there is strong evidence that the Federal Reserve’s increases in the target federal funds rate have slowed deal volume. He points to data from MSCI Real Assets, showing industrial deal vol