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  • By Scott Perkins, SIOR, CCIM, NAI Hanson

Industrial sector primed for post-COVID-19 new normal

Although we are still waiting for the full impacts of the COVID-19 outbreak to become apparent, it is obvious that it will have far-reaching implications for our industry. Quarantines and social distancing have already caused much pain to the hospitality and retail sectors and the lasting effects will linger long after COVID-19 subsides. On the flip side, the short-term impacts to the industrial sector have been less dire but changes to supply chains and consumer habits brought on by COVID-19 could reshape the sector in the next several months.Over the past several quarters, the industrial sector faced record-high demand with limited supply causing vacancy rates to remain very low and a measured supply of new construction continuing to appear across northern and central New Jersey. As we entered 2020, it appeared we were on track for more of the same. Seemingly overnight, COVID-19 has completely rewritten that script, forcing the commercial real estate industry to reassess the long-term trajectory of the industrial market. Much of that trajectory will be shaped by the broader economy. Unfortunately, as our stock market tumbles and economic activity grinds to a halt, I know it is easy to make comparisons to the Great Recession. Following that recession and evaporation of liquidity, it took the industrial sector quite some time to recover, with low occupancy and stalled construction projects all over the nation. READ MORE

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