There is a lot of uncertainty in the market and fears of a looming recession. We can see several investors looking for advice on where they should allocate their funds or diversify their portfolios. One of the areas they are looking to diversify is the real estate sector. But is this the place you should be investing in? In this article, we dig deeper into the 2023 Industrial Real Estate Outlook and look at the factors that support the outlook and the forecast. 

Industrial Real Estate Rents Holding & Increasing

One of the biggest reasons to invest in industrial real estate is the steady income in the form of rent. The industrial real estate rent is being maintained and it is also steadily increasing across some sectors. Some areas have seen a significant year-over-year increase in rents over the past year. This is a great opportunity for investors who are looking to enjoy better cash flow and higher liquidity. 

The Vacancy Rate for Industrial Real Estate is at Historic Lows

Another positive sign is the low vacancy rate. The current vacancy rate for industrial real estate is at historic lows, well below the 10-year average in some cases. This also means a better and steady cash flow with an opportunity for expansion and growth. 

Year Over Year Industrial Space Absorption

If you look at the absorption rate in the industrial market, it has steadily grown year over year and even the forecasts see this increase to remain consistent through 2024. The high absorption rate has been driven by the construction activity as well as growing leasing activity. 

Commercial & Industrial Real Estate Under Construction Remains High

2022 has seen a record high in new construction in the real estate sector and the industrial space. Even this year, the number continues to remain high well halfway into 2023.  Investing in industrial real estate in an uncertain market will not only ensure steady and consistent income but will also help diversify your portfolio with assets that are growing in demand. The overall sentiment towards industrial real estate is positive despite economic uncertainties which makes it one of the safest assets to invest in today.

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