2021 NORTH AMERICAN INDUSTRIAL OUTLOOK

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2021 NORTH AMERICAN INDUSTRIAL OUTLOOK
2021 NORTH AMERICAN
INDUSTRIAL OUTLOOK
2021 NORTH AMERICAN INDUSTRIAL OUTLOOK
2021 NORTH AMERICAN INDUSTRIAL OUTLOOK
EXECUTIVE SUMMARY

  1            Industrial demand is booming, but so is supply

 2             Pent-up demand story forming—
               expect economic surge in back half of 2021

 3             Fundamentals to continue generating solid rent growth
               throughout the next few years

 4             Global trade expected to rise as economic growth
               accelerates and trade tensions ease, boosting demand

      For a deep dive into local market
          fundamentals click here.
2021 NORTH AMERICAN INDUSTRIAL OUTLOOK
NORTH AMERICAN INDUSTRIAL OUTLOOK 2019

2021 NORTH AMERICAN
INDUSTRIAL OUTLOOK

              MARKET OVERVIEW                                       increase of only 130 basis points (bps) over
                                                                    year-end 2020. Despite the forecasted
              The Industrial Market
                                                                    uptick, North American vacancy will remain
              is Still Hungry for Space
                                                                    nearly on par with its 10-year average (2012-
              The forecast for North American industrial
                                                                    2021) of 6%. Average net asking rents for
              absorption from 2021 to 2022 is a healthy
                                                                    classes of industrial product will rise to a new
              481.3 million square feet (msf). New supply—
                                                                    nominal high of $6.97 per square foot (psf)
              which has surpassed demand two years in               at year-end 2022. Supply-side constraints,
              a row—will maintain this trend over the next          such as onerous municipal approval
              two years. New deliveries are projected to            processes, will continue to constrain supply
              reach 697.3 msf of product from 2021 to               growth in Canada where overall net rents will
              2022. Nonetheless, North American vacancy             remain the highest in North America at USD
              will remain low, ending 2022 at 6.2%—an               $10.19 psf by the close of 2022.

NORTH AMERICAN SUPPLY AND DEMAND

      400                                                                                                               12.0%

      300                                                                                                               10.0%

      200                                                                                                               8.0%
MSF

       100                                                                                                              6.0%

        -                                                                                                               4.0%

      (100)                                                                                                             2.0%

      (200)                                                                                                             0.0%
                                 New Supply (MSF)   Net Absorption (MSF)    Overall Vacancy (%)

                                                                                 Source: Cushman & Wakefield Research

4 / CUSHMAN & WAKEFIELD
2021 NORTH AMERICAN INDUSTRIAL OUTLOOK
TOP 5 MARKETS FOR DEMAND                         TOP 5 MARKETS FOR SUPPLY
NET ABSORPTION (MSF)                             DELIVERIES (MSF)
2021-2022                                        2021-2022
RANK    MARKET                            MSF    RANK    MARKET                             MSF

 1      Dallas/Ft. Worth, TX             47.0     1      Dallas/Ft. Worth, TX             41.4

 2      Chicago, IL                      31.4     2      Chicago, IL                      34.3

 3      Atlanta, GA                      30.2     3      Inland Empire, CA                33.5

 4      Inland Empire, CA                20.1     4      Atlanta, GA                      29.9

 5      Houston, TX                      21.8     5      Memphis, TN                      26.0

The economic recovery, progress in global        to 2022. Over the next two years, Toronto
trade and the accelerated buildout of            and Vancouver are expected to account for
e-commerce and 3PL last-mile facilities,         over 71.8% of Canadian occupancy growth,
fulfillment centers, and bulk warehouses         but Ottawa will grow most rapidly (demand
will reinforce demand for industrial real        relative to inventory) over the same period.
estate. For the eighth consecutive year, net     Despite the extremely tight vacancy rates in
absorption in the U.S. will exceed 200 msf       Mexico, positive net absorption will continue
in 2021; we anticipate this streak will extend   with Mexico City approaching 9 msf of
                                                 absorption by 2022.
through 2022. In Canada, industrial markets
will maintain their longest uninterrupted        New leasing activity in Mexico City continues
period of positive net absorption through        to be strong. But with one of the lowest
2022 with a near record high in 2021.            vacancy rates among North American
Canadian industrial markets are forecast to      markets in 2020, stronger occupancy gains
register 38.1 msf of net absorption from 2021    will be limited to new construction deliveries

                                                              NORTH AMERICAN INDUSTRIAL OUTLOOK 2021 / 5
2021 NORTH AMERICAN INDUSTRIAL OUTLOOK
NORTH AMERICAN INDUSTRIAL OUTLOOK 2021

          coming to market. This is also true for the
          other main industrial markets in Mexico,
          such as Monterrey, Tijuana and Ciudad
          Juarez, where availability rates decreased
          significantly throughout 2020. Demand
          for industrial space in Mexico will benefit
          from the U.S.-Mexico-Canada Agreement
          (USMCA) that went into effect mid-year
          2020. As an example, the auto industry will
          create additional real estate demand as
          well as jobs for the sector. The USMCA now
          requires that 75% of a vehicle’s components
          be manufactured within North America, up
          from around 60% under the North American
          Free Trade Agreement (NAFTA). It also now
          mandates that 70% of a vehicle’s aluminum
          or steel come from the three countries. These
          changes will help bolster manufacturing and
          logistics demand throughout North America.

          Demand in the North American industrial
          market is geographically dispersed,
          especially throughout the United States.
          The top 10 markets for demand include
          at least one market from the four Census
          regions tracked in the U.S. industrial market
          (Northeast, Midwest, South and West).
          Coming in at the number one spot with
          47 msf of positive absorption through
          2022 is the Dallas/Ft. Worth market which
          experienced explosive growth over the past
          decade of expansion, significantly outpacing    Demand in the
          the next three top markets Chicago, Atlanta
          and the Inland Empire, whose forecasts          North American
          are over 30 msf. Though this is nothing to      industrial market
          be wary of, these four markets alone are
          anticipated to make up 29% of demand            is geographically
          for North America from 2021 to 2022.            dispersed, especially
          Regionally, the majority of demand will
          come from the South region in the U.S.,         throughout the
          accounting for 38% of demand, followed by       United States.
          the West and the Midwest regions. With port
          proximity, rail access and established border
          markets, the South will continue to lead the
          North American industrial markets.

6 / CUSHMAN & WAKEFIELD
2021 NORTH AMERICAN INDUSTRIAL OUTLOOK
NORTH AMERICA AS A PERCENT OF INVENTORY

 2.5%

 2.0%

 1.5%

 1.0%

 0.5%

 0.0%
         2006   2007   2008   2009   2010    2011    2012    2013      2014   2015     2016    2017     2018   2019   2020F   2021F   2022F
-0.5%

 -1.0%

 -1.5%
                                     Absorption as a % of Inventory       Delivieries as a % of Inventory

Source: The CoStar Group (for select markets only), Cushman & Wakefield Research

More Supply Means More Options                                        are build-to-suit. As a result, we anticipate a
North American industrial markets are                                 slow rebalancing in market conditions with
projected to deliver 697.3 msf of new                                 a gradual uptick in vacancy. Regionally, the
product by year-end 2022. Over 92% of                                 South in the U.S. again comes in first for the
the space delivered will be in the U.S.                               largest number of deliveries, forecasted to
where the market has been strapped for                                deliver nearly 225 msf of new construction
quality product over the past few years.                              by year-end 2022. However, Mexico City
Despite supply being forecasted to outpace                            is expected to deliver the most space as a
demand for the next two years, the pipeline                           percent of total inventory at 5%.
will remain elevated in primary industrial
markets, port-proximate markets (both                                 North American demand overall is expected
intermodal and maritime), and in markets                              to trail supply by about 125 msf in 2021
with dense or fast-growing populations.                               and 90 msf in 2022, causing vacancy rates
Up until Q1 2019, supply had not outpaced                             to rise modestly from current record low
demand; but this trend has started to change                          levels. Mexico City, however, will see a 90-
with investors questioning whether the                                bps decrease in vacancy from 2020 to
U.S. would enter a period of overbuilding                             year-end 2022, bringing the rate to 2.1%.
while Canadian markets and Mexico City                                Canadian markets will likely see only a
remain stable. The short answer is it did not                         30-bps increase in vacancy due to a larger
happen in 2020, and likely will not in 2021.                          pipeline of 44 msf expected to deliver over
The amount of space that has been under                               the next two years. Vacancy in the U.S. will
construction in North America exceeded                                surpass 6% for the first time since 2015 by
365 msf during 2020—the largest amount of                             year-end 2021, coming in at 6.1%, and is likely
space ever under construction, and most of                            to increase by an additional 50 bps during
that space was in the U.S. which averaged                             2022 to 6.6%. Most markets across the three
a pipeline of 335.9 msf on a quarterly basis.                         countries remain starved for quality space,
The pipeline may sound concerning with                                and as more supply enters the market, rental
the level of demand not keeping up, but                               rates are expected to continue increasing,
the circumstances around the deliveries are                           albeit at a slightly slower pace. With options
fundamentally better than in the past. Pre-                           becoming more plentiful, tenants can afford
leasing rates indicate this will continue, plus,                      to be picky when it comes to site selection,
the composition of supply matters. A much                             forcing landlords to slow increases in rental
higher percentage of projects in the pipeline                         rates to remain competitive.
                                                                                        NORTH AMERICAN INDUSTRIAL OUTLOOK 2021 / 7
2021 NORTH AMERICAN INDUSTRIAL OUTLOOK
NORTH AMERICAN INDUSTRIAL OUTLOOK 2021

          Rents Will Reach New Highs                            as Dallas/Ft. Worth, Inland Empire, Atlanta,
          North American industrial asking rents                Chicago, PA I-81/I-78 Distribution Corridor,
          are expected to reach a new nominal high              Indianapolis and Central New Jersey. The
          of USD $6.97 psf by year-end 2022, and                demand for newer product will command
          the growth will be broad based across                 a premium and gives landlords the option
          many markets in all regions. Across North             to raise prices for the most competitive
          American industrial markets, 29 markets               tenants. But also expect to see higher
          are forecast to register more than 10% rent           rents among supply-constrained markets,
          growth from the beginning of 2021 to year-            especially those close to ports (both inland
          end 2022, with two of the top three being             and maritime) such as Los Angeles, Seattle,
          Canadian: Toronto at 25% and Vancouver                San Francisco Peninsula and Orange County.
          at 23.9%. All but nine (of the 85) markets            The markets being fed by the West and
          tracked for this report will see positive             East Coast ports or the intermodal hubs in
          rent growth through 2022. Other North                 the middle of the country are where U.S.
          American cities that will post some of the            rent growth will be strongest due to limited
          strongest rent growth will be those with the          supply and desirable location.
          highest demand and quality supply such

 NORTH AMERICAN RENT GROWTH

  $8.00                                                                                                            8.0%

  $7.00                                                                                                            6.0%

  $6.00                                                                                                            4.0%

  $5.00                                                                                                            2.0%

  $4.00                                                                                                            0.0%

  $3.00                                                                                                            -2.0%

  $2.00                                                                                                            -4.0%

  $1.00                                                                                                            -6.0%

  $0.00                                                                                                            -8.0%

                                Asking Rents (Q4) (USD/SF)   Rent Growth (USD, %)

                                                                                    Source: Cushman & Wakefield Research

8 / CUSHMAN & WAKEFIELD
2021 NORTH AMERICAN INDUSTRIAL OUTLOOK
COVID-19 & THE                                                        of the global and regional economy. Indeed,
                                                                      the next few years may be defined by a
ECONOMY                                                               period of strong, synchronized global growth
2020 was rough, but is setting the                                    similar to 2017. Once the pandemic largely
stage for a global rebound                                            subsides, that is.
COVID-19 disrupted everything in 2020. And
with its onset more than one year behind                              Supporting the near-term recovery are
the globe, and the arrival and approval of                            three key features: less restrictive lockdown
multiple viable vaccines, the stage for a                             measures (which immediately led to a jump
rebound in the global economy is being set.                           in economic growth across the globe but
As North America scales up access to several                          have since contributed less momentum),
vaccines, and warmer weather more easily                              demand from regions that have had more
allows for businesses to operate (particularly
                                                                      relative success in containing COVID-19,
outdoors), even under social distancing
                                                                      and policy support. For example, bilateral
protocols, economic momentum is likely to
                                                                      merchandise trade flow data from the
build throughout the spring. Not only that,
                                                                      International Monetary Fund show that
but a few other forces are liable to stimulate
                                                                      exports from Canada are down 14% year-to-
demand in the economy: 1) inventory draw-
downs in 2020 will need to be replenished,                            date (January through August). For Mexico,
2) pent-up demand for tourism and other                               they are down 17% and for the U.S., 16%.
services will start to be unleashed, 3) global                        But, when looking at exports to mainland
demand will support the budding trade                                 China, where containment of the virus has
recovery and 4) the ability to congregate                             allowed for a much faster return to normalcy,
again will mean that these trends benefit a                           Canada’s exports are only down 1%, Mexico’s
wider segment—possibly even the totality—                             are up 8% and the U.S.’s are only down 7%.

REAL GDP FORECASTS
Annual growth rate

                                                                   2020Q4-2022Q4 CAGR
 8.0%
                   3.3%                      3.4%                          4.2%                           4.0%          4.4%
 6.0%

 4.0%

 2.0%

 0.0%

-2.0%

-4.0%

-6.0%

-8.0%

-10.0%
                 Canada                     Mexico                    United States                  North America     Global
                                                     2017   2018    2019   2020       2021    2022

Source: Oxford Economics, Cushman & Wakefield Research
Note: Country real GDP figures based on data in local currency units. North American real GDP figures in PPP units.

                                                                                             NORTH AMERICAN INDUSTRIAL OUTLOOK 2021 / 9
2021 NORTH AMERICAN INDUSTRIAL OUTLOOK
NORTH AMERICAN INDUSTRIAL OUTLOOK 2021

             Policy actions holding up economy,                          June, an expansion of 71%. It has remained
             for now                                                     roughly stable since then. The Bank of
             North America’s near-term recovery is being                 Canada’s balance sheet expanded from
             supported by policy measures that have                      C$121.5 billion to over C$500 billion over
             been disproportionately large in the U.S. and               the same time period, and was at C$544.8
             Canada relative to Mexico. The U.S. passed                  billion, an increase of nearly 350%, as of mid-
             five major pieces of legislation in response                December. Because each country’s economy
             to COVID-19, totaling over $4 trillion of                   is operating so far below its potential, and
             direct and indirect stimulus, or 19.4% of                   with aggregate demand subdued by hard-hit
             pre-COVID-19 GDP. Canada has provided                       sectors, few central banks are worried about
             $320 billion of such support for its economy,               reversing course to fight inflation. Indeed,
             representing 18.4% of its pre-COVID-19 GDP
                                                                         the outlook for interest rates has softened
             level. Despite Mexico’s somewhat lackluster
                                                                         considerably from pre-COVID-19, supporting
             fiscal response totaling $9.4 billion, or 0.7%
                                                                         inflows of capital to yield-producing assets,
             of its pre-COVID-19 GDP, it has indisputably
                                                                         such as commercial real estate.
             benefitted from its northern neighbors’
             actions through regional linkages. Further, all             Mexico’s central bank, Banco de México, had
             three countries’ central banks substantially                a substantially different starting point; it had
             altered policy in response to the pandemic.                 raised interest rates to 8.25% by mid-2019
                                                                         to combat falling currency values and high
             Unconcerned with inflation, almost all major
             central banks went on offense in early                      inflation. Having started to lower rates in
             2020. The U.S. Federal Reserve’s Federal                    August 2019, it quickly accelerated its easing
             Open Market Committee (FOMC) lowered                        and lowered the target interbank rate from
             its target rate to a range of 0% to 0.25%                   7.0% to 4.25% over the course of 2020 in a
             while the Bank of Canada lowered its rate to                more gradual set of rate cuts than Canada
             0.25%. A rapid increase in quantitative easing              and the U.S undertook. This is in part due to
             was accompanied by the deployment of                        its strict inflation mandate, as Mexico’s core
             multiple credit facilities to stabilize financial           inflation has remained above 3% throughout
             market conditions. The Federal Reserve’s                    2020. Still, the current rate is below the
             balance sheet grew from $4.2 trillion at                    estimate-neutral rate, meaning that monetary
             the end of February to $7.2 trillion by mid-                policy conditions are expansionary.

   FISCAL SUPPORT AS A PERCENT OF 2019 GDP
   Policy Buoys 2020 Economy

      U.S.

    Canada

    Mexico

             0         2        4         6           8            10           12          14    16           18          20
                                           Direct Fiscal Support        Liquidity Support
                                                                                                       Source: Moody’s Analytics

10 / CUSHMAN & WAKEFIELD
North American demand
Stronger, unique recovery                                       overall is expected to trail
to accelerate in 2021
With accommodative policy bridging the
                                                                supply by about 125 msf in
economic chasm and inoculation currently                        2021 and 90 msf in 2022,
ramping up, it is likely that 2021 will be a
turning point, particularly in the stability of
                                                                causing vacancy rates to
the outlook. It is assumed that current and                     rise modestly from current
forthcoming vaccines will be successful in not
only preventing COVID-19 outbreaks, with                        record low levels.
obvious economic repercussions, but that this
also allows for more sustainable private sector
growth, having gradually decoupled from
the persistently high levels of uncertainty of
2020. And while growth will no longer be
as closely linked to the virus itself and its
concomitant policy responses, COVID-19 will
nonetheless influence the foundation of the
next expansion.

One such theme is that of an uneven
recovery. Already this is being seen across
industries and across wage tiers—with those
hurt most by social distancing seeing the
least robust improvements. This has been
particularly true of the tourist-centric and
service-oriented industries as well as those in
low-wage jobs across all sectors. In Mexico,
the tertiary sector, which employs about
three-fifths of workers, has also been hard hit.

An uneven recovery is even taking hold
within the industrial segment of the
economy, with manufacturing, wholesale
and various forms of transportation
employment all still well below pre-COVID-19
peak levels. These sectors are sensitive to
flows of inputs and final goods that trend
with global demand, manufacturing, and
trade activity. Although global growth is
expected to rebound in 2021, growing by
5.1% according to a consensus of forecasts,1
it is not expected to recover until the second
half of 2021 (and that is only to pre-COVID-19
levels, not to the level that would have
been achieved in the absence of a global
recession). The World Trade Organization
estimates that world trade will grow by 7.2%
1
  The average of the International Monetary Fund, the Organi-
zation for Economic Co-operation and Development, Oxford
Economics and Moody’s Analytics.
                                                                     NORTH AMERICAN INDUSTRIAL OUTLOOK 2021 / 11
NORTH AMERICAN INDUSTRIAL OUTLOOK 2021

UNEVEN RECOVERY

          MEXICO                                                                                                              U.S.
          EMPLOYMENT INDEX:                                                                                                   YR/YR % CHANGE IN EMPLOYMENT
          JAN 2020 LEVEL = 100                                                                                                BY WAGE TIER
           105

                                                                                                                                                                                    May-20

                                                                                                                                                                                                               Aug-20
                                                                                                                                                         Feb-20

                                                                                                                                                                  Mar-20

                                                                                                                                                                           Apr-20

                                                                                                                                                                                                                        Sep-20
                                                                                                                                                                                             Jun-20

                                                                                                                                                                                                                                 Oct-20
                                                                                                                                                Jan-20
                                                                                                                                      Dec-19

                                                                                                                                                                                                      Jul-20
           100
            95
                                                                                                                               5%
            90
                                                                                                                               0%
            85
                                                                                                                               -5%
            80                                                                                                                -10%
            75                                                                                                                -15%

                                                                                                 8/1/2020
                                                                          6/1/2020

                                                                                                            9/1/2020
                                                    4/1/2020

                                                                                      7/1/2020
                              2/1/2020

                                         3/1/2020
                   1/1/2020

                                                               5/1/2020

                                                                                                                              -20%
                                                                                                                              -25%
                                                                                                                              -30%

                        Primary and Secondary Sectors                                   Tertiary Sector                                        High-Wage                      Mid-Wage                         Low-Wage

          CANADA
          PRE-COVID-19 PEAK TO TODAY % CHANGE IN EMPLOYMENT
             Professional; scientific and technical services
                                        Educational services
                Finance; insurance; real estate and leasing
           Forestry; fishing; mining; quarrying; oil and gas
                                                     Utilities
                                       Public administration
                                              Manufacturing
                          Health care and social assistance
                                                       Trade
                                   Goods-producing sector
                                                       Total
                                 Services-producing sector
                                              Other services
                                               Construction
                           Transportation and warehousing
                                                 Agriculture
            Business; building and other support services
                        Information; culture and recreation
                        Accommodation and food services

                                                                                     -25%          -20%                -15%    -10%            -5%          0%             5%
          Source: Statistics Canada, Instituto Nacional de Estadística Geografia e Informática (INEGI), Encuesta
          Nacional de Ocupación y Empleo (ENOE), U.S. Bureau of Labor Statistics, Moody’s Analytics

12 / CUSHMAN & WAKEFIELD
in 2021, only partially offsetting the loss                   of demand. Importantly, the structural shifts
of activity in 2020.2 The global recovery is                  in consumer behavior will also mean that
expected to be led by the East, with China                    industrial property markets are likely to see
and India seeing faster improvements in                       healthy demand despite underlying pockets
industrial production and trade than the
                                                              of weakness in the broader labor market.
West. This suggests industrial demand
drivers will remain below their potential
in 2021 due to a lack of a comprehensive
                                                              CONCLUSION
recovery across all sectors. More diverse                     The necessity to further accelerate the
demand should return in 2022.                                 adoption of e-commerce within the economy
                                                              insulated the industrial real estate sector from
The strength in industrial real estate
                                                              the downturns that befell the hospitality,
throughout the pandemic has been a
                                                              office and retail sectors. This ramping up of
function of pulling forward e-commerce-
                                                              the industrial sector to support e-commerce
related demand due to simple necessity.
The pandemic-induced surge in online                          growth will benefit industrial real estate in
shopping created a bifurcation in industrial                  the near- and medium-term but may also
employment, with warehousing and final-                       lead to slower growth in 2022 as the sector
mile employment reaching record levels in                     compensates for overshooting due to the
the U.S. In Canada, warehouse and final-mile                  partly unforeseen spike in demand. Given that
employment has outperformed significantly,                    the global economy is expected to be firing
only 5% below pre-COVID-19 levels (versus                     on all cylinders by that time, demand from
nearly 20% for overall employment). As the                    other segments of the economy is likely to
growth of e-commerce demand slows from
                                                              accelerate and offset any e-commerce-specific
its feverish pace during the height of the
                                                              loss of momentum. Thus, the stage is set for a
pandemic, it will remain a significant source
                                                              healthy and evolving demand backdrop.
2
    https://www.wto.org/english/news_e/pres20_e/pr862_e.htm

                                                                           NORTH AMERICAN INDUSTRIAL OUTLOOK 2021 / 13
INDEX

TOP 50 MARKETS FOR SUPPLY
DELIVERIES (MSF)
2021-2022

RANK     MARKET                                           MSF    RANK   MARKET                        MSF

 1       Dallas/Ft. Worth, TX                             41.4   26     Nashville, TN                 7.0

 2       Chicago, IL                                      34.3   27     Denver, CO                    6.3

 3       Inland Empire, CA                                33.5   28     Northern NJ                   5.8

 4       Atlanta, GA                                      29.9   29     San Diego, CA                 5.7

 5       Memphis, TN                                      26.1   30     Las Vegas, NV                 5.7

 6       Houston, TX                                      25.0   31     Seattle, WA                   5.4

 7       Indianapolis, IN                                 21.0   32     San Antonio, TX               5.3

 8       Toronto, ON                                      20.7   33     Minneapolis, MN               5.2

 9       PA I81/I78 Corridor, PA                          20.6   34     Central Valley, CA            4.9

 10      Phoenix, AZ                                      18.3   35     Ottawa, ON                    4.6

 11      Austin, TX                                       14.2   36     Jacksonville, FL              4.3

 12      Kansas City, MO                                  14.0   37     Salt Lake City, UT            4.2

 13      Vancouver, BC                                    13.5   38     Colorado Springs, CO          4.1

 14      Central NJ                                       11.8   39     Fort Lauderdale, FL           3.8

 15      Philadelphia, PA                                 11.7   40     Silicon Valley, CA            3.6

 16      Charlotte, NC                                    10.9   41     DC Suburbs, VA                3.6

 17      Columbus, OH                                      9.7   42     Lakeland, FL                  3.6

 18      Norfolk, VA                                       8.2   43     Reno, NV                      3.5

 19      Miami, FL                                         7.9   44     Calgary, AB                   3.4

 20      Savannah, GA                                      7.8   45     Louisville, KY                3.2

 21      Baltimore, MD                                     7.7   46     San Francisco Peninsula, CA   3.2

 22      St. Louis, MO                                     7.6   47     Sacramento, CA                2.8

 23      Los Angeles, CA                                   7.3   48     Oakland, CA                   2.8

 24      Tampa, FL                                         7.2   49     Orlando, FL                   2.5

 25      Cincinnati, OH                                    7.2   50     NYC Boroughs, NY              2.5

Source: Cushman & Wakefield Research, The CoStar Group
*2021-2022 figures are derived from CoStar’s forecasts.

14 / CUSHMAN & WAKEFIELD
TOP 50 MARKETS FOR DEMAND
NET ABSORPTION (MSF)
2021-2022

RANK     MARKET                                            MSF   RANK   MARKET                                MSF

 1       Dallas/Ft. Worth, TX                             47.0   26     San Diego, CA                          5.4

 2       Chicago, IL                                      31.4   27     Norfolk, VA                            5.3

 3       Atlanta, GA                                      30.2   28     Central Valley, CA                     4.9

 4       Inland Empire, CA                                30.1   29     San Antonio, TX                        4.5

 5       Houston, TX                                      21.8   30     Cincinnati, OH                         4.4

 6       Indianapolis, IN                                 19.1   31     Seattle, WA                            4.4

 7       PA I81/I78 Corridor, PA                          19.0   32     Jacksonville, FL                       4.1

 8       Memphis, TN                                      15.1   33     Salt Lake City, UT                     3.9

 9       Central NJ                                       15.1   34     Montreal, QC                           3.9

 10      Kansas City, MO                                  14.6   35     Colorado Springs, CO                   3.9

 11      Toronto, ON                                      14.1   36     Minneapolis, MN                        3.9

 12      Phoenix, AZ                                      13.8   37     Reno, NV                               3.8

 13      Vancouver, BC                                    13.3   38     Louisville, KY                         3.7

 14      Austin, TX                                        9.4   39     Charleston, SC                         3.7

 15      Los Angeles, CA                                   7.2   40     Ottawa, ON                             3.6

 16      Charlotte, NC                                     7.1   41     Columbus, OH                           3.3

 17      St. Louis, MO                                     6.6   42     Fort Lauderdale, FL                    3.3

 18      Savannah, GA                                      6.4   43     Calgary, AB                            3.2

 19      Nashville, TN                                     6.3   44     Las Vegas, NV                          3.1

 20      Silicon Valley, CA                                6.2   45     San Francisco Peninsula, CA            2.9

 21      Denver, CO                                        6.1   46     Miami, FL                              2.7

 22      Philadelphia, PA                                  5.8   47     Oakland, CA                            2.6

 23      Northern NJ                                       5.8   48     Sacramento, CA                         2.5

 24      Tampa, FL                                         5.5   49     Orlando, FL                            2.5

 25      Baltimore, MD                                     5.5   50     Lakeland, FL                           2.4

Source: Cushman & Wakefield Research, The CoStar Group
*2021-2022 figures are derived from CoStar’s forecasts.

                                                                        NORTH AMERICAN INDUSTRIAL OUTLOOK 2021 / 15
INDEX

TOP 50 MARKETS FOR RELATIVE DEMAND & SUPPLY
DELIVERIES AS % OF INVENTORY
2021-2022

 1       Ottawa, ON                                       19.2%   26   Las Vegas, NV           3.8%

 2       Austin, TX                                       13.0%   27   San Antonio, TX         3.6%

 3       Colorado Springs, CO                             11.3%   28   Baltimore, MD           3.5%

 4       Savannah, GA                                      9.4%   29   San Diego, CA           3.5%

 5       Memphis, TN                                       9.0%   30   Reno, NV                3.4%

 6       Philadelphia, PA                                  7.4%   31   Central NJ              3.3%

 7       Indianapolis, IN                                  7.3%   32   Nashville, TN           3.2%

 8       Norfolk, VA                                       6.8%   33   Columbus, OH            3.1%

 9       Charlotte, NC                                     6.7%   34   St. Louis, MO           3.0%

 10      Tampa, FL                                         6.4%   35   Chicago, IL             2.9%

 11      PA I81/I78 Corridor, PA                           6.3%   36   DC Suburbs, VA          2.8%

 12      Vancouver, BC                                     6.2%   37   Calgary, AB             2.6%

 13      Kansas City, MO                                   6.0%   38   Salt Lake City, UT      2.6%

 14      Inland Empire, CA                                 5.8%   39   Toronto, ON             2.6%

 15      San Francisco Peninsula, CA                       5.6%   40   Central Valley, CA      2.6%

 16      Houston, TX                                       5.5%   41   Denver, CO              2.6%

 17      Phoenix, AZ                                       5.4%   42   Charleston, SC          2.4%

 18      West Palm Beach, FL                               5.2%   43   Seattle, WA             2.3%

 19      Dallas/Ft. Worth, TX                              5.1%   44   Cincinnati, OH          2.1%

 20      Lakeland, FL                                      4.9%   45   Orlando, FL             2.1%

 21      Miami, FL                                         4.9%   46   Northern NJ             2.0%

 22      Atlanta, GA                                       4.6%   47   Fort Myers/Naples, FL   1.9%

 23      Minneapolis, MN                                   4.4%   48   Sacramento, CA          1.9%

 24      Fort Lauderdale, FL                               4.2%   49   Fredericksburg, VA      1.8%

 25      Jacksonville, FL                                  4.2%   50   Silicon Valley, CA      1.6%

Source: Cushman & Wakefield Research, The CoStar Group
*2021-2022 figures are derived from CoStar’s forecasts.

16 / CUSHMAN & WAKEFIELD
TOP 50 MARKETS FOR RELATIVE DEMAND & SUPPLY
NET ABSORPTION AS A % OF INVENTORY
2021-2022

 1       Ottawa, ON                                       15.1%   26   San Diego, CA                         3.3%

 2       Colorado Springs, CO                             10.7%   27   Minneapolis, MN                       3.3%

 3       Austin, TX                                        8.6%   28   Fredericksburg, VA                    3.1%

 4       Savannah, GA                                      7.7%   29   San Antonio, TX                       3.0%

 5       Indianapolis, IN                                  6.6%   30   Nashville, TN                         2.8%

 6       Kansas City, MO                                   6.2%   31   Silicon Valley, CA                    2.7%

 7       Vancouver, BC                                     6.1%   32   Chicago, IL                           2.7%

 8       PA I81/I78 Corridor, PA                           5.9%   33   St. Louis, MO                         2.6%

 9       Dallas/Ft. Worth, TX                              5.8%   34   Central Valley, CA                    2.5%

 10      Inland Empire, CA                                 5.3%   35   Baltimore, MD                         2.5%

 11      San Francisco Peninsula, CA                       5.2%   36   Salt Lake City, UT                    2.5%

 12      Memphis, TN                                       5.2%   37   Denver, CO                            2.5%

 13      Tampa, FL                                         4.9%   38   Calgary, AB                           2.4%

 14      Houston, TX                                       4.8%   39   West Palm Beach, FL                   2.2%

 15      Atlanta, GA                                       4.7%   40   Orlando, FL                           2.1%

 16      Charlotte, NC                                     4.4%   41   SF North Bay, CA                      2.1%

 17      Norfolk, VA                                       4.4%   42   Las Vegas, NV                         2.0%

 18      Central NJ                                        4.1%   43   Northern NJ                           2.0%

 19      Charleston, SC                                    4.1%   44   Seattle, WA                           1.9%

 20      Phoenix, AZ                                       4.1%   45   DC Suburbs, VA                        1.8%

 21      Jacksonville, FL                                  4.0%   46   Toronto, ON                           1.8%

 22      Reno, NV                                          3.7%   47   Sacramento, CA                        1.7%

 23      Philadelphia, PA                                  3.7%   48   Miami, FL                             1.7%

 24      Fort Lauderdale, FL                               3.7%   49   Louisville, KY                        1.6%

 25      Lakeland, FL                                      3.3%   50   Fort Myers/Naples, FL                 1.6%

Source: Cushman & Wakefield Research, The CoStar Group
*2021-2022 figures are derived from CoStar’s forecasts.

                                                                       NORTH AMERICAN INDUSTRIAL OUTLOOK 2021 / 17
ABOUT CUSHMAN & WAKEFIELD
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CONTRIBUTORS

Carolyn Salzer                         Jason Tolliver
Americas Head of Logistics &           Global Head of Logistics & Industrial
Industrial Research                    Research
carolyn.salzer@cushwake.com            Managing Director, Investor Services
                                       jason.tolliver@cushwake.com
Rebecca Rockey
Global Head of Economic Analysis &     Kristina Bowman
Forecasting                            National Manager of Research,
rebecca.rockey@cushwake.com            Canadian Markets
                                       kristina.bowman@ca.cushwake.com
Rob Miller                             Jose Luis Rubi
Senior Research Manager, Global        Market Research Manager,
Research                               Mexican Markets
rob.miller@cushwake.com                joseluis.rubi@cushwake.com

FOR MORE INFORMATION
Tray Anderson
Logistics & Industrial Services
Lead, Americas
tray.anderson@cushwake.com

Bethany Clark
Senior Managing Director,
Strategy & Operations - Logistics
& Industrial Services, Americas
bethany.clark@cushwake.com

                                                               © 2021 Cushman & Wakefield. All rights reserved. The information contained within this report
                                                               is gathered from multiple sources believed to be reliable. The information may contain errors or
cushmanwakefield.com                                           omissions and is presented without any warranty or representations as to its accuracy.
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