Cushman & Wakefield released the U.S. Industrial MarketBeat Report for the third quarter of 2017 and the numbers are exciting. 2017 is on track to be another impressive year for the U.S. industrial market as deliveries, absorption, and occupancies continue to exhibit desirable market indicators.
Another Solid Year for Industrial:
A record-breaking number of new deliveries has hit the market through the first three quarters of 2017, the largest wave of new space delivered during this time period of any year. Even so, industrial tenants continue to absorb impressive numbers, pushing the vacancy rate to a historic low. Every industrial segment remains in growth mode with warehouse, manufacturing, and flex product posting desirable numbers from January through September.
Bigger the Market, Bigger the Leasing and Development:
Over one-third of the year-to-date absorption can be contributed to five core markets within the United States. Dallas/Ft. Worth, Atlanta, Inland Empire, Chicago, and the Pennslyvania I-81/I-78 Distribution Corridor lead the country in absorption and development for 2017 so far, indicating that the bulk of activity remains concentrated in primary industrial cities.
Strong Fundamentals in Secondary Markets:
Over 30 secondary markets have registered more than one million square feet of net absorption in 2017. Strong fundamentals in secondary markets like Kansas City, Greenville, Baltimore, Phoenix, and Cincinnati are contributors to the projected historical growth expected through the end of 2017.
Supply Not Overpowering Demand:
The construction pipeline is at its highest level this cycle and despite the increase, supply and demand remain in relative equilibrium in most markets. Given the tight market, developers continue to break ground with over 2 million square feet currently under construction with the greatest concentration in the south and west regions.
Rents Continue to Run:
Strong leasing activity by both traditional industrial users and eCommerce-related occupiers continues to fuel rent growths. Among the regions, year-over-year rent growth in Q3 2017 was strongest in the West, followed by the Midwest and the South while rents in the Northeast were virtually unchanged. Asking rents increased quarter-over-quarter in a majority of markets with the most notable increases occurring in coastal markets.
Download the Full Report!
In the full report, see market indicators including net absorption, overall vacancy rates, average asking rents, and inventory for the United States major industrial real estate markets. Visit the Research Page (Link) to access a free copy of the report.
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