SQFT Under Construction
The facilities needed to serve the growing eCommerce market require 300% more space than traditional retail. In addition, Supply Chain demands is increasing the space required for warehousing in the USA. 65% of business are strategically stockpiling key materials.
Rents have increased over 32% nationally since the Covid pandemic started. in the New England area, rents have jumped to $12 NNN for industrial assets. We are at a record 20 year + low vacancy rate, as occupancy has soared across industrial properties.
Increasing demand has led to better CAP rates for existing assets, with the average sale price up 35 percent since 2019, to $133 per sqft. Retailers bought over 10 Million SQFT of industrial assets in the last year alone (8x previous average). Patriot is able to identify key development locations, and development costs are minimized, as construction is mostly prefabricated, allowing for higher returns on capital.
2021 had a record amount of new construction in the industrial space, but this was met with a record 520,000,000 sqft of industrial space being absorbed. Development has been unable to keep up with demand.
Supply chain issues around key US ports has led to development and demand increase in other ports around the country. By identifying key logistics routes, Patriot is able to develop ahead of demand, producing a state of the art facility that can command top market rents.
With a shortage of truck drivers, increasing labor costs, and reduced technology costs, Fortune 500 businesses are looking to prime industrial spaces close to their customer base to service their clients. Robots are no longer exclusive to the top companies, leading to huge growth in the demand for modern facilities.