Industrial Development Outlook for the Next Cycle

This technical report discusses the current state and future outlook of the U.S. industrial sector, which is showing signs of recovery following a correction in 2022-2023. The report outlines key factors affecting the sector, including resilient net operating income (NOI) growth, which averages mid-6%, and a significant decline in projects under construction, down nearly 70% from their peak. It details how modern logistics facilities are attracting demand while older assets face occupancy challenges. The report also examines trade dynamics, noting that U.S. trade flows remain high despite tariff volatility, and highlights the widening performance gap between top and bottom quartile assets. The analysis suggests that targeted industrial development could present attractive investment opportunities as demand for modern facilities increases. The report concludes that while challenges persist, the industrial sector is well-positioned for recovery in the coming years, driven by strong tenant demand and a reset in the development cycle.