The once red-hot industrial sector is beginning to show signs of a cool-off in the construction industry.
Kyle Roberts, executive managing director at Newmark, points to the credit crunch’s impact on the development community. While certain markets should remain strong, Roberts expects to see substantially less product delivered starting midway through 2024 due to tightened credit conditions.
New construction starts in the sector dropped 38% year-over-year, while demand for industrial space tumbled by 40% in the first quarter of 2023, according to the latest industrial research from Newmark, a New York City-based commercial real estate advisory firm.
