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Estate trend is occurring in Canada , however costs for labor and costs of importing materials are more expensive than seen in Mexico . US-based hot markets include Cincinnati , Cleveland , Houston and Denver , each seeing cost escalation at or above the averages . Markets with cost reductions greater than the average include Greensboro , Greenville , Chicago , and Montreal .
The fluctuations in markets are a complex mix of competition : the cost of labor in a particular market , commodity pricing , and inflation . The good news is that in many
markets , costs continued to moderate in 2024 . Lumber prices fell 1.4 percent , steel prices fell 8.4 percent , and copper prices fell 2.9 percent on a year-over-year basis . These savings were partially passed on to developers . It should be noted that there was an increase in concrete costs of 7.4 percent due to the closure of a major plant in Mexico tightening the national supply .
While e-commerce continues to increase as a percentage of sales , some of the pullforward effect – firms building out sooner and faster during the pandemic – will weigh on the demand outlook through the first half of 2025 . A slowly improving global growth picture is likely to lead to a rise in manufacturing activity , which will benefit industrial real estate heading into 2025 and beyond . This momentum of the consumers ’ wallet and a resilient job market coupled with real income growth , should lead to steady consumption requiring continued growth in the industrial real estate and construction sector . Manufacturing should continue to drive a great deal of activity for industrial real estate , but it will be years before the impacts are fully seen based on the normal timeframe of business need to construction completion – generally three to four years . Once projects are delivered , we expect manufacturing employment to rise and supplemental firms to take root as well . ■
For a list of the sources used in this article , please contact the editor .
Richard Jantz www . cushmanwakefield . com
Richard Jantz , LEEDAP PMP , is Executive Managing Director , Cushman & Wakefield Project and Development Services . Cushman & Wakefield is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries . In 2023 , the firm reported revenue of $ 9.5 billion across its core services of property , facilities and project management , leasing , capital markets , and valuation and other services .
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