Inventory, inventory, inventory specifically the lack thereof was a major theme of the 2020 Building Owners & Managers Association of Idaho symposium last month.

KEY TAKEAWAYS
• Leasing activity was stable in 2019, at roughly the same volume as in 2018.
• The West region exhibited the strongest leasing activity, with more than 100 million square feet leased for a fourth consecutive year.
• The tech industry once again dominated leasing activity, accounting for 27.6% of the major leases—up from 26.1% in 2018. Tech leasing totaled slightly less than leasing for the financial services, government and real estate combined.
• For a second consecutive year there were more than 25 large leases (over 400,000 sf) signed in 2019.

Overall transaction activity for investments accelerated modestly in the fourth quarter of 2019 to $152.2 billion—up 2% quarter-over-quarter (QoQ). Single asset sales drove the increase, notably deals over $250 million, which rose 35% QoQ and 30% year-over-year. For multifamily, the average annual effective rent growth in the U.S. in 2019 was 2.8%, down 80 basis points from the 2018 average. Rent growth moderation at this mature stage of the cycle is a positive indicator of the health of the multifamily sector.

The forecast for North American industrial absorption in 2020-2021 is a healthy 459.9 msf. Economic indicators, with strong links to industrial fundamentals, point to continued growth in 2020 and 2021. Industrial has been the investors’ darling in recent years, and there is no indication of this love affair coming to an end any time soon. Over the next couple of years, we expect it to remain one of the leading product types to watch

The U.S. economy ended the year on an optimistic note. Businesses continued to add jobs at a healthy clip. Employment in the key office-using sectors increased by 150,000 jobs in the fourth quarter. Consumer confidence remains high. Wages are rising faster than inflation, yielding extra spending power, reflected in the 18.8% increase in online shopping over the holiday season. The industrial market finished strong absorbing 68.8 msf in the Q4, the most space in a single quarter last year.

The North American industrial market saw a bit of a slowdown in 2019 coming off a banner year in 2018. But what’s in store for 2020-2021? With the continued support of tailwinds like technology, eCommerce, AI, blockchain, and the ongoing tensions with international trade, it is safe to say the next couple years will be anything but boring for the North American industrial market.

2019 was the year that the pop-up store "popped out." Digital natives going bricks-and-mortar; an explosion of local entrepreneurism; the rise of upstart brands; a new launching pad for global retailers, and so much more—these are all examples of the types of pop-up trends we are seeing in retail.