Bisnow interviewed Chris Riley, vice chairman at CBRE and speaker at the upcoming I.CON West 2019, June 6-7 in Long Beach, California. See an excerpt of the article below, and register online for the biggest conference in industrial real estate.
Investors are bracing for a downturn, and commercial real estate experts have been speculating for months about when the next recession could come — but professionals in the industrial and logistics world are drawing sunnier conclusions.
“It’s not even worth asking ‘what inning are we in,’ because we’ve never been in a ballgame like this,” CBRE Vice Chairman Chris Riley said. “We’ve seen nine successive years of exceptionally strong performance from logistics. Based on a traditional seven-year cycle, we would be overdue for a downturn. But with the fundamentals looking the way they do right now, this upswing could continue for two or three more years.”
The industrial sector refuses to stop posting record numbers. Nationwide vacancy for warehouse space is sitting at an all-time low of 4.3%. And though a whopping 200M SF of industrial and logistics space came to market in 2018, 299M SF was absorbed, according to CBRE.
The availability of industrial real estate has declined for 34 consecutive quarters. From a risk-adjusted basis, warehouses are the best bet investors have, which has made industrial space the darling of the CRE industry, Riley said.
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