US Warehouse Rents to Rise Despite Rate Drop: CEO

Warehouse rents will continue to rise despite falling logistics transportation rates, says the CEO of the world's largest warehouse landlord.

US Warehouse Rents to Rise Despite Rate Drop: CEO
Photo by Remy Gieling / Unsplash

Prologis CEO Hamid Moghadam predicts warehouse rents will continue to rise, even as other supply-chain costs fall from pandemic highs. Lease prices have proven more resilient than transport rates, which have sharply dropped due to a shift from goods to services, inflation, and higher borrowing costs. However, rent hikes are moderating as market conditions normalize. Prologis anticipates a 5% to 10% rental growth across its portfolio this year, down from last year's nearly 30%.

Warehouse vacancy rates have risen slightly to 2.5% from 2% in the previous quarter, due to cargo rerouting to East Coast and Gulf ports to avoid potential West Coast labor disputes.

Source: Reuters

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