Newmark is reframing how industrial stakeholders evaluate risk and performance by introducing a U.S. Industrial Market Durability Index designed to assess which markets are better positioned to withstand ongoing disruption. The firm notes that since 2020, the U.S. industrial sector has endured more shocks than in the prior two decades combined, citing pandemic-era supply chain breakdowns, inflation, AI-driven investment shifts and geopolitical instability in the Middle East as key sources of volatility.
In a recent report titled “Shocks to the System: Market Durability Is the New Lens for U.S. Industrial Amid Permanent Volatility,” Newmark argues that traditional metrics such as headline rent growth or near-term occupancy are no longer sufficient on their own for making long-range investment decisions. Instead, the research suggests investors should prioritize markets and buildings that can sustain tenant demand through future shocks, not just those that performed well in the last cycle.
The Durability Index is Newmark’s response to this challenge. Senior research analyst Jamil Harkness, who contributed to the work, told Connect CRE that recent years have made clear that not all industrial markets are equally prepared to absorb disruption. The index is meant to turn the concept of resilience into something more measurable and actionable for real estate decision-makers, offering a way to compare industrial markets on their underlying staying power rather than on short-lived cyclical momentum.
Newmark’s framework emphasizes several structural drivers of resilience. These include proximity to consumption hubs and e-commerce fulfillment needs, access to multiple transportation modes, a concentration of modern industrial inventory and the strength of local manufacturing platforms, including labor availability and operating conditions. Together, these factors are intended to highlight markets that remain relevant to tenants even as costs, freight patterns and supply chains continue to shift.
Harkness emphasized that the Durability Index should not be read as a literal forecast. Instead, it is a relative positioning tool meant to sit alongside other components of underwriting and market analysis, helping investors differentiate between locations with more durable demand profiles and those that may be more vulnerable when conditions change. While some pressures weighing on the industrial sector today may ease over time, Harkness expects volatility to remain a more notable part of the operating environment than it was before the pandemic.
As a result, the report suggests that resilience is becoming as important to long-term performance as lease expirations, rent assumptions and absorption forecasts. Markets that merely benefited from the last expansionary cycle may not be the ones that lead in the next phase. Instead, Newmark’s work points to the importance of focusing on locations best positioned to stay relevant to occupiers through multiple cycles and potential future disruptions.
