The industrial real estate market’s recent surge in demand has been seriously bolstered by a shift in consumer spending patterns since the onset of the COVID-19 pandemic.

industrial real estate

Why the Recent Spike in Demand?

One of the main drivers for the increased demand in industrial real estate is the growing need for a more efficient supply chain. COVID-19 led to supply shortages for various products that prompted many manufacturing companies to return to the U.S. to produce their products. These manufacturers require new production facilities to meet demand.

Consumers who were previously hesitant to shop online were forced to embrace ecommerce to shop for their necessities. More people shopping online equates to more requests for home delivery and an increased need for production, processing and distribution centers, particularly for Last Mile Distribution properties. This shift to e-commerce-centric shopping will continue to bode well for the industrial real estate market for the next several years.

Additionally, various sectors are innovating how they manufacture and distribute, thus creating a need for new and versatile industrial development. For example, the automotive industry’s shift to electric vehicles is requiring a new real estate mindset to accommodate the research and development for these pioneering automobiles. Indoor, or vertical farming, is a ‘growing trend’ popping up everywhere. These high cubic facilities are needed for year round growing to meet the demand for healthy food product at a time when the need is greater than ever. In addition to worsening homelessness and hunger, natural disasters and climate change are negatively impacting traditional means of meeting domestic our food demand.

These are just a couple of examples that shine a light on this being an ideal time for investors to grow their industrial portfolios.

Industrial Expansion

The ballooning industrial real estate market has witnessed increasing demand for innovation in manufacturing, logistics, storage, and production facilities. While its increase in demand is largely ecommerce-driven and fueled by an elevated need for shipping and distribution hubs, below are some additional industrial property uses which are expected to follow:

-Steel mills

-Lumber yards

-Garment manufacturers

Conglomerates such as Walmart and Amazon will continue to acquire industrial properties to meet their last mile distribution needs, and small business will also continue to need industrial real estate to support big business.


Industrial Investment Opportunity

The rise of e-commerce platforms has strengthened the long-term outlook for the industrial real estate sector. It is expected to remain robust for the immediate and long-term future.

Industrial properties can be leased to a single tenant or to multiple tenants. The flexibility of these open spaces enables easy alterations to suit the needs of multiple users.

Long term leases of large spaces occupied by stable tenants generate high returns and consistent cash flow, making investment in industrial property very attractive for today’s savvy investor. The shortage of industrial property to meet present demand has contributed to the rise in industrial rents across all types of industrial property.

Ready to Act? If you’re interested in entering or expanding your industrial real estate portfolio in the Mid-Atlantic region, contact TD&A’s Office & Industrial Team for an initial exploratory conversation to see how you can benefit from our more than 50 years of experience representing owners and occupiers of industrial property. Come collaborate with TD&A; we would love the opportunity to join you on your real estate journey.

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