Cushman & Wakefield: US Industrial Vacancy Hits 15-Year Low
The US industrial vacancy rate hit a 15-year low in 2015, after solid demand and rent growth in the sector, a Cushman & Wakefield report says.
US industrial markets absorbed 62.9M SF in Q4' 15, up 9.1% from Q3 and 0.5% year-over-year. 2015's net industrial absorption hit 238.6M SF, while the industrial vacancy rate fell to 7.2%, 220 bps below the historical average.
For 2016, demand should outstrip supply, chief economist Kevin Thorpe says, but the manufacturing sector will have to deal with slowing economic growth, falling commodity prices and a stronger US dollar.
"The core of the US remains solid enough to weather the storm, but demand for industrial space is expected to cool down this year,” Kevin says. Meanwhile, high leasing and tight vacancy will continue to support rents across primary and secondary industrial markets.
The Inland Empire took the top spot for demand in the industrial sector during Q4 at 6M SF. Dallas/Fort Worth came in second at 5.2M SF with Phoenix third at 4M SF.
San Diego (pictured) jumped to the top spot in rental growth, surging to 19% in rental appreciation year-over-year. Pittsburgh came in second (17.9%) while LA took third at 11.4%.