No slowing down the national industrial market

There seems to be no slowing down the national industrial market

It doesn’t seem that a Polar Vertex could slow down the industrial market. Even Punxsutawney Phil predicted an early spring; all good signs for freight and logistics efficiencies.

There seems to be no slowing down the national industrial market, based on data from Transwestern’s fourth quarter report for the sector. Despite nearly 1 billion square feet of new inventory delivered in the past three years, vacancy ended the quarter at 4.7 percent, less than half of the post-recession high of 9.5 percent in 2010. Additional indicators include:

  • Net absorption is forecast to surpass 240 million square feet in 2019 for a sixth consecutive year, with demand for all regions and product types growing.
  • Increased speculative supply will place upward pressure on vacancy. We forecast average annual vacancy to rise 30 to 40 bps to between 5.1 to 5.2 percent by year-end 2019.
  • In most markets, more than half of product under construction is preleased.
  • Rental rate appreciation will continue, although rent growth will slowly begin to decelerate in 2019.
  • Port markets and infill-sited submarkets of populated inland distribution hubs are where U.S. rent growth will be the strongest.
  • The greatest uptick in leasing activity will be in the 10,000 to 100,000 square foot and the 300,000 to 500,00 square foot segments. Leasing activity in the 100,000 to 300,000 square foot range will strengthen from 2018 levels, while activity within the 500,000 square foot and larger range is expected to be on part with 2018 levels.

The changing landscape of retail and the above-mentioned numbers suggest that the industrial market will not face a “too big to fail” scenario. While there is no sign of a recession the industry is always preparing and looking forward.

What keeps you motivated to stay on your stable path? For me, it’s exercise and engagement. I live my life by the Helen Keller quote, “Life is either a great adventure or nothing.” As such, I is an active alpine climber and has scaled many of the world’s tallest peaks while raising funds for the children’s charity, “Place of Hope.”

If you know anything about alpine climbing, you know that you never summit alone. The importance of having a strong team translates into my tried-and-true approach to business: face-to-face meetings, handwritten notes, and backing up handshake commitments. This method may seem trite or rudimentary as they are the most basic of fundamental tasks, but the fact that it has seemingly gone to the wayside has enabled me to create points of separation and distinction as his old fashion values resonate in today’s modern world. It’s about team, all the time.

For Warren Buffet, as an example, it has nothing to do with money. According to an Inc. article, he had already “hit his number” by the time he was around 27-years-old when he’d saved enough–roughly $2 million in today’s dollars–through his early business ventures and successful investing to purchase (mortgage-free) a nice house in his hometown of Omaha and have enough left over to be able to live a comfortable upper middle class life solely off his investments for the rest of his life. Instead, I think Mr. Buffett remains motivated because of the following: He simply loves it.

Mark Cuban, serial entrepreneur and investor, claims in a Bloomberg article that his motivation comes from twin motivations: a repulsion toward failure and a constant desire to win. He understands that entrepreneurship is a constant competition.

Richard Branson recently shared what’s kept him motivated, across more than 40 years in business … “I’ve always believed that life is not a dress rehearsal, and I feel that you should embrace each day with enthusiasm, curiosity and energy,” the Virgin Group founder says. “This spirit has not only driven Virgin’s business successes, but has inspired us to do some wonderful work through our non-profit foundation, Virgin Unite.”

So, Phil, thanks for the head’s up about Spring coming early. For us at McCraney Property Company, spring has already sprung, with more than eight million square feet of industrial developments under active construction!

Steven McCraney

President & CEO

McCraney Property Company

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