Executives Express U.S. Market Confidence
While “cautious optimism” remained the consensus among attendees at I.con, the premier industrial conference for the National Association of Industrial and Office Properties (NAIOP), three speakers representing Prologis Americas expressed their reasons for the solid performance in industrial real estate Prologis is experiencing:
- Gene Reilly, CEO of Prologis Americas and the current chairman of NAIOP, presented an overview of the industrial market at the opening luncheon, pointing out the increase in net absorption and declining vacancy rate due to the steady but restrained increase in completions forecast for the next two years.
- Larry Harmsen, COO of Prologis Americas, participating in a CIO roundtable, explained that investment strategies and pricing in the present economy are creating a strong demand for Class-A space. “It’s currently all about the best stuff,” he said.
- Kim Snyder, president of Prologis’ Southwest Region, discussed current development activity at the development cycle session, citing seven build-to-suit projects and 15 speculative developments across the Americas, from Seattle to São Paulo.
When discussing the cause of the “construction renaissance,” all three speakers pointed to the e-commerce phenomenon, which has customers like Amazon and Wal-Mart racing to reinvent the online retail experience with same-day delivery. “With less physical product in stores, distribution centers are warehousing the inventory, and just-in-time management is being refined to a science,” commented Mr. Snyder.