Logistics facilities in the age of technological climate change
The secular changes taking place in the distribution ecosystem are having a positive impact on logistics properties, in marked contrast to the trials facing U.S. retail. The trajectory of logistics properties — defined as facilities used for the warehousing and distribution of goods — is soaring by any measure. Rents are increasing, vacancies declining and values rising, while industrial REITs outperform other REITs, and logistics and delivery jobs increase faster than total U.S. employment. For the first time in the 25-year history of the Association of Foreign Investors in Real Estate’s survey, the industrial category is considered the No. 1 property type by foreign real estate investors.
Logistics demand velocity now exceeds the U.S. economy by a ratio of 2:1, as logistics demand growth, as measured by CoStar Group, approaches 4 percent while U.S. GDP growth is approximately 2 percent. Historically, the relationship was close to 1:1. The main catalyst for excess abso