Business Trends

Demand for Small Industrial Facilities Rising, by Transwestern

File Type: Free Content, Article
Release Date: June 2014
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Johnson Diversey

Increased positive absorption rates for 50,000- to 100,000-square-foot industrial facilities are creating development opportunities in key markets throughout the U.S., according to an article by Ridge Development President Jim Martell in Transwestern’s Insights + Trends + Opportunities, 2Q 2014. The trend of increasing absorption “is expected to prompt more speculative and build-to-suit development of small-scale facilities, which has not happened in eight to 10 years.”

Demand for small-scale industrial facilities “is outstripping available supply for the first time in a long time,” Martell continues, adding that a new wave of development “will bring state-of-the-art buildings to market featuring higher clear heights, trailer parking, speed bays, wider column spacing and ESFR sprinkler systems. Much of the construction is expected to occur on urban, infill sites or near airports."

Transwestern research indicates growing demand for such facilities in Los Angeles and San Francisco as well as California’s Inland Empire and Orange County — and in Atlanta, Northern New Jersey, Chicago, Miami and Boston.

“In addition to the development and investment opportunities,” Martell concludes, “positive absorption of this size of facilities provides a barometer of entrepreneurial optimism that is driving an important segment of the U.S. economy.”