What is Industrial Real Estate?

Industrial real estate is an umbrella term for manufacturing, production, research and development, storage and distribution facilities. While industrial real estate is sometimes overshadowed by glitzier sectors like residential, commercial and retail, industrial real estate shouldn’t be overlooked as an essential enabler of global commerce and as a resilient, income-generating asset class.

Industrial real estate makes the global economy hum. Well-located, high-quality industrial real estate keeps the world’s supply chains working, enables trade and e-commerce, and ensures the efficient movement of goods from makers to markets.


Aren’t industrial real estate facilities like warehouses mostly used for storing stuff?

No. Most industrial real estate facilities are dedicated to keeping the world’s goods in motion. Very few of the goods in industrial real estate buildings are in storage. Where industrial real estate buildings are used for distribution, their contents are in motion to retail stores, businesses, or end consumers through e-commerce fulfillment channels. Where industrial real estate buildings are used for manufacturing, their operations are often tuned for just-in-time production and distribution that keeps pace with end-user demand—which means relatively little inventory is left sitting in storage.


What drives demand for industrial real estate?

In short, everything. Consumption is the main driver of industrial real estate demand, which comes as no surprise since consumption accounts for the majority of all economic activity. Trade is another key driver of demand. Industrial real estate facilities are key nodes in the global trading system, allowing the convenient and efficient movement of goods through the supply chain to end consumers. Then there’s supply chain reconfiguration. In developing markets, companies are upgrading from smaller, outdated industrial real estate facilities to newer, larger industrial real estate buildings with modern features and upgrades. In all other markets, as the relative attractiveness of manufacturing locations and transit routes shifts, as new consumer markets rise to prominence, and as same-day and next-day delivery become the new normal, companies adjust nodes in their supply chains, driving demand for new industrial real estate buildings in new locations.


Where are industrial real estate facilities located?

There are two basic location strategies for industrial real estate. Much industrial real estate is located adjacent to key transportation hubs – seaports, highway and rail junctions and airports. Increasingly, in response to burgeoning e-commerce and consumer demand for same-day and next-day fulfillment, industrial real estate facilities are located in infill locations within or proximate to large population centers.

Prologis Properties

Prologis Georgetown Crossroads

Prologis Georgetown Crossroads

Seattle, Washington

This modern multistory warehouse by downtown Seattle, coming in 2018, is setting the standard for the future of urban industrial real estate.

The image shown is logistics facility, Bergheim DC1, located in Bergheim,Germany.

Bergheim DC1

Bergheim, Germany

A 441,300 SF (41,000 SQM) logistics facility and administrative center with LED lighting and an efficient heating system serving as the European...

The image shown is logistics facility, Hamburg Waltershof DC5, located in Hamburg, Germany.

Hamburg Waltershof DC5

Hamburg, Germany

Three modern warehouses totaling more than 107,600 SF (10,000 SQM) are in an optimal logistics park location close to container terminals and...

The image shown is LEED certified warehouse Prologis Redlands Distribution Center, located in Redlands, United States.

Prologis Redlands Distribution Center

Redlands, California

This 657,639 SF (61,097 SQM) LEED Silver-certified sustainably designed warehouse is situated on 55 acres of land south of the Santa Ana River in the Inland Empire. The facility was built in 2009 with 3 miles of high-pressure 12-inch municipal water lines to eliminate the need for a pump house. All...

The image shown is LEED certified warehouse Prologis Port Reading , located in Port Reading, United States.

Prologis Port Reading

Port Reading, New Jersey

This 280,384 SF (26,049 SQM) LEED-certified warehouse, built with sustainable design features, is part of a premier 2.75 MSF master-planned, fully...

The image shown is logistics space, Redlands DC6, located in Redlands, California.

Redlands DC6

Redlands, California

This prime industrial logistics space in the Inland Empire has direct access to Interstate 10 and the 210 and 15 freeways.

The image shown is BREEAM certified warehouse Midpoint Park DC#3, located in Birmingham, United Kingdom.

DC3 Prologis Park Midpoint

Birmingham, United Kingdom

This 236,000 SF (22,000 SQM) warehouse was built to be sustainable, earning BREEAM “Excellent” accreditation. It is part of a 1.52 MSF logistics park on the site of a former sewage waste treatment plant. Redeveloping the site brought over 1,000 jobs to the local community.  In addition, Prologis has...

The image shown is BREEAM certified warehouse DC5 Prologis Park Midpoint, located in Sutton Coldfield, United Kingdom.

DC5 Prologis Park Midpoint

Sutton Coldfield, United Kingdom

This 368,000 SF (34,200 SQM) BREEAM “Excellent” accredited warehouse is part of a 1.52 MSF logistics park on the site of a former sewage waste...

The image shown is logistics warehouse Munich East DC1, located in Munich, Germany.

Munich East DC1

Bruckberg, Germany

A large build-to-suit for BMW in one of Germany’s most land-constrained locations northeast of the Munich metropolitan market.

The image shown is industrial warehouse, Cologne DC5, located in Cologne, Germany.

Cologne DC5

Köln, Germany

A build-to-suit for Objectflor, this 199,100 SF (18,500 SQM) sustainable industrial warehouse in one of the largest associated logistics sites in Cologne is able to operate on only 65 percent of the permitted primary energy requirements.

Industrial Real Estate Markets that Matter

This is a photo of San Francisco Bay Area, United States

San Francisco Bay Area, Industrial Gateway to the Pacific and Silicon Valley

The San Francisco Bay Area, which includes Oakland and San Jose, is a vibrant, densely populated, high-income region that serves as the high-technology industry’s global capital. With a population of more than 7 million, it is the nation’s fifth-largest metropolitan area. As such, it is an engine of consumption and an industrial property power...

This is a photo of Denver, United States

Denver, Industrial Property and Logistics Capital of the Rocky Mountain West

The Denver region, with a population of 3.1 million, is among the most economically vibrant metropolitan areas in the United States. Its diversified economy is supported by various industries, including natural resources, health care, education and construction. As such, it is a prime market for industrial property.

A revitalized downtown, a...

This is a photo of Chicago, United States

Chicago, Logistics Capital of the Midwest

Chicago is the one of the most important logistics and transportation hubs in the U.S. with a powerful network of rail, airport and truck routes that reach nationwide markets. Chicago is also the largest industrial real estate market in the country, with 1.3 billion square feet of warehouse space.
A historic center of manufacturing, trade and...

Paris, Europe’s Largest Logistics Real Estate Market

Paris, Europe’s Largest Logistics Real Estate Market

Paris, with a population of 12.5 million consumers, is among Europe’s largest logistics markets. The city commands one-third of France’s total GDP. Its economy is driven by financial, business and IT services.

A thriving center of global commerce, Paris serves as headquarters to 25 Fortune 500 companies—the third-highest concentration after Tokyo...

This is a photo of Prague, Czech Republic

Prague, Capital of Modernizing Czech Republic

Prague, a storied city, has emerged as the 21st century political, cultural and business capital of the Czech Republic. With a metropolitan area population of about 1.3 million, Prague is an important consumer economy. Prague accounts for nearly one-quarter of the Czech economy’s total output, and Prague’s GDP per capita is more than twice the...

This is a photo of Shanghai, China

Shanghai, China’s Commercial and Financial Capital

Shanghai, China’s historic gateway to the world, is one of the most significant urban centers in the global economy. With a population of about 24 million, it is the largest city in China and the fifth-largest metropolitan area in the world.

The combination of Shanghai’s location on the Yangtze River Delta, a large and increasingly well-off...

Tokyo, Japan

Tokyo, Global Capital of Commerce and Industry

Tokyo, the political and financial capital of Japan, is one of the most functional and impressive urban agglomerations in the world. With a population of about 13.5 million, this densely populated urban area houses 11 percent of Japan’s population. The broader Tokyo megalopolis is the most populous in the world, with 37.8 million people.

Tokyo is...