Cincinnati-Area Industrial Market Finishes Strong In 2017, Looks Forward To Product Upsurge In 2018
In some ways, 2017 ended up being a replay of 2016 for the greater Cincinnati industrial market: a lot of development but also a lot of absorption, resulting in low vacancies and rent appreciation, according NKF's report on the market in Q4.
Last year started out very strong, with 3.3M SF of absorption in the first quarter alone, driving industrial vacancies down to 3%. In the fourth quarter, absorption was 527K SF, which was not enough to prevent vacancy from ticking up to 3.4%.
All together in 2017, industrial-space users snapped up 4.6M SF in metro Cincinnati, short of the record 5.2M SF in 2016, but still a vigorous pace. Developers did not keep pace in 2017, adding 2.8M SF of product, NKF reports.
In Q4, only 606K SF of spec construction was completed, all of which was due to NorthPoint Development finishing Buildings 1 and 2 at Union Centre Logistics Park.
That kind of demand put upward pressure on rents, with average asking rents in greater Cincinnati experiencing a 6.3% increase in 2017, to $4.19/SF.
Current conditions might mean 2018 will resemble the previous years as well. Demand is still brisk, and as of Q1, 4M SF of industrial space is under construction in greater Cincinnati, with 1.3M SF of that represented by Amazon's bulk warehouse project in Monroe, which is about midway through construction.