The Philadelphia Inquirer highlights, Warehouse space is harder to find as the commercial real estate market heats up, how the demand for Philadelphia warehouse space, especially between 5,000 and 10,000 SF, is keeping rents at record highs. The article mentions how smaller businesses in many cases are continuing to compete against larger players to secure warehouse leases, “much of the commercial space is being gobbled up by larger players but there are plenty of opportunities for small businesses, as long as they’re prepared to do what a landlord requires in order to get a great location.”
The demand for warehouse space will likely continue into 2023 according to a report by Cushman & Wakefield which was highlighted in a recent article, Warehouse rents to climb through end of 2023, Cushman and Wakefield says. on Supply Chain Quarterly. The article concludes, “Vacancy rates for North American industrial space sink to new lows in face of pressure from pandemic economic recovery, e-commerce growth, port congestion, and materials shortages.”
The article went further anticipating, “trends will combine to fill nearly all available warehouse space in the region, with vacancy rates sinking to a scarce 3.8% at year-end 2021—a decrease over 2020 year-end levels of 4.9%. And with space in high demand, rents will rise, expected to finish the year at 8.5% above 2020 levels, setting another record high asking rental rate for industrial space.”
With these types of predictions there should be some opportunities for real estate investors looking to capitalize on the market trends. One area which could see further investment is converting older abandoned warehouse space into usable warehouse space especially in areas like the Philadelphia suburbs which have limited space for new buildings.