The demand for warehouses spiked after the end of the recession, when economic growth accelerated and retailer’s snatched up leases to satisfy rising online orders, according to the report. As a result, the cost of warehouse space has skyrocketed, especially in cities like Los Angeles and Seattle, where less than 5 percent of total warehouse capacity is available to lease, according to CBRE Group.
However, at the end of 2016, supply started to catch up with demand, said Hamid Moghadam, chairman and CEO of Prologis — one of the largest industrial real estate companies in the U.S.
“New construction has been relatively disciplined, so the market is much stronger,”Mr. Moghadam told WSJ. “Now we are getting into the more mature part of the cycle. It’s more of a balanced market, with modest rental growth.”
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