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1 min read Q&A

'The need for industrial space has been strong'

Industrial real estate demand remains strong, but limited supply and rising costs continue to challenge developers, investors, and tenants alike.
'The need for industrial space has been strong'
Photo by Leo Fosdal / Unsplash

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Real-estate brokers have keen insight into trends that impact construction. Grant Fulkerson, SIOR, a principal with Lee & Associates, has brokered nearly 1,000 sale and lease transactions, valued at more than $1 billion. We asked him to share his opinion on what’s moving the marketplace and how it will impact the construction industry.

 What are you seeing in terms of demand from investors, developers and tenants compared to last year?

Sale prices and lease rates experienced steady to rapid increase until their plateau in 2024. The industrial sector has maintained its strength over the past year and demand outpaces supply in most markets.  

 What are you noticing about requests from tenants?  

Large break rooms/cafeterias are less and less necessary. If industrial buildings have a significant mezzanine, the areas underneath are often more functional as engineering/assembly space rather than traditional office space. 

 What are some trends you hope change this year?  

Increase in supply, reduction in construction and improvements cost and adjustments in lease rates to compensate for increases in OPEX—mainly taxes and increasing insurance.  

 And one you hope continues?  

Demand. The need for industrial space has been strong. The obstacle has been building availability.

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The Level is written by Margot Lester and edited by Katie Parsons.

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