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Industrial Tenants Face Sticker Shock Amid Spiraling Inflation

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Renters of industrial properties are facing sticker shock in the current inflationary environment, with national effective rent growth expected to increase nearly 23% year over year in 2022.

“Although industrial has a reputation for shorter lease terms, the reality is that the weighted average lease term for industrial is around five to seven years, much like it is for office,” write Cushman & Wakefield economists Rebecca Rockey and James Bohnaker in a new analysis. “Many of the leases that are rolling today are therefore significantly underpriced on the tenant side, especially with escalations that may have been negotiated five to seven years ago.”

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Industrial Developers Shouldn’t Delay Construction As Demand Rages

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Industrial developers would be wise to plan ahead—and carefully—as materials constraints continue to plague the building process and elongate delivery timelines.

But what is the one thing they shouldn’t do? Delay construction.

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Four Reasons Industrial Real Estate Is Unstoppable In 2022

It may be 2022, but many of the forces that drove the economy in 2021 are still in the driver’s seat.

The long-term upward trend of e-commerce is stronger than ever. The supply chain that gets products from websites to consumers is still not performing well. Inflation is rising, and the Federal Reserve probably will soon raise interest rates. Luckily, there’s an investment that may benefit from each of these forces — specifically, industrial real estate, which includes properties such as warehouses, manufacturing facilities, and even marijuana growing facilities.

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