01/24/2023
With a potential recession looming and a certain e-commerce giant announcing that they have
leased too much space, uncertainty has begun to surround the industrial sector. Additionally,
when you factor in a construction pipeline of industrial space that sits at an all-time high, this
further heightens concerns about a coming imbalance for industrial properties.
For context and perspective on these and other forces, LoopNet interviewed Sabrina Unger, head
of research at American Realty Advisors, to discuss the company's outlook for the U.S. industrial
sector and where they see the industrial market heading over the next 12 to 18 months.
There’s been much talk recently about a coming slowdown in industrial fundamentals. Can you
discuss what’s feeding that view and whether or not you agree with that outlook?
There are several clouds on the horizon that investors in the sector are watching. The first is the
drawback in the e-commerce pe*******on rate in recent quarters. People are used to seeing ecommerce’s share of total retail sales tick up consistently over time. So, when the share declined
from 16.4% — the pandemic high in the second quarter of 2020 — down to 14.3% in the first
quarter of 2022, despite total retail sales having increased in the same period, the immediate
reaction was to interpret that to mean that peak pe*******on is roughly 15% of sales.
