The U.S. industrial real estate market had a solid year in 2018 and has continued to strengthen through the first quarter of 2019. Industrial rents are on an upward path, while the construction pipeline is robust and development is spurred on by the e-commerce sector.
In terms of development, 2019 is poised to bring continuity and stability, as the total square footage scheduled for delivery by year-end is set to match the total pipeline volume of 2018. Last year, developers brought 270 projects totaling 105.7 million square feet of new industrial space to the U.S. market, while in 2019, 304 projects and 104.6 million square feet are expected to be delivered. Chicago, the Inland Empire, and Dallas-Fort Worth are still the top three destinations for industrial construction, just as in 2018. Investors are betting big on multi-building industrial campuses, as the 10 largest projects scheduled for 2019 delivery all feature more than one building. December is likely to be the busiest month of the year, with the three largest projects scheduled for completion during the final month of 2019.
Check out more details regarding the largest industrial projects of the year below:
The largest industrial project set to come online this year is Phase I of Bridge Point 78, namely buildings 3, 5, 6, and 7, in Phillipsburg, N.J. With a delivery date scheduled for December 2019, the project spearheaded by Bridge Development Partners will feature close to 2.2 million square feet of industrial space. The massive property was once known as Commerce Park and served as the home of Ingersoll-Rand. Bridge Development Partners purchased the 365-acre site in 2018 for $43 million, according to Lehigh Valley Live. The former Ingersoll-Rand property reportedly used to employ more than 4,000 workers, but the manufacturing plant then sat vacant for decades, impacting the economy and workforce in both Phillipsburg and neighboring Lopatcong, N.J. Now the site will be revitalized with the help of Bridge Development and CBRE, which is in charge of marketing the property to prospective tenants.
The only other industrial project to feature more than 2 million square feet is also scheduled for completion in December 2019. Buildings 1-4 within the Passport Park campus are currently underway in Irving, Texas, with Trammell Crow at the helm. The Passport Business Park, or PBP, is a 598-acre mixed-use development district located at the sound end of the DFW International Airport, right at the heart of the Metroplex, as described in the official development plan. The eastern portion of the site will be used for industrial purposes, while the portion west of Passport Boulevard will include a combination of office, research, hospitality, restaurant, and retail space.
All the 10 projects featured on our list are all part of a larger campus, instead of stand-alone industrial buildings, and total a combined 16.7 million square feet of new industrial space. By comparison, the 10 largest projects of 2018 totaled 14 million square feet, and the largest one–3290 Volvo Car Drive in Ridgeville, S.C.–featured 1.7 million square feet. However, looking at the total pipeline numbers, 2019 marks a slight decrease in the total square footage scheduled to be delivered. In 2018, a total of 270 buildings featuring 106 million square feet of industrial space were brought to market, while in 2019 304 new buildings and 104.5 million square feet are underway.
The most active market in terms of industrial development during 2019 is set to be Inland Empire, with 74 projects totaling close to 19.8 million square feet of space scheduled for delivery by the end of the year. The Empire will strike back this year, after topping the list of active industrial markets in 2018, as well, with more than 22 million square feet delivered last year.
Chicago is also set to keep busy during 2019, as 63 industrial developments featuring a total of 17.9 million square feet are scheduled for delivery by year-end, followed closely by DFW, with 17.8 developments on track for delivery this year. Check out the full list below:
Data source: Yardi Matrix, extracted March 6th, 2019.
Our analysis included industrial properties featuring at least 90,000 square feet, reflecting the total square footage of the property–in the case of mixed-use assets, this includes office, retail, multifamily, and other commercial use types.
We included industrial properties delivered in 2018 and properties under construction/scheduled for delivery in 2019.
*Properties that are being delivered within the same campus highlight the total square footage for all the new buildings.
Some projects include more than 1 building. The ‘No. of Buildings’ column from the properties tables reflect the total number of buildings included in all properties.