US Industrial Markets Keep Record Pace In Q3
The US industrial sector hit its 26th consecutive quarter of net occupancy gains in Q3, according to Cushman & Wakefield.
Industrial markets absorbed 74.9M SF this past quarter, a 29.1% increase compared to the year-ago quarter. Cushman & Wakefield chief economist Kevin Thorpe says industrial demand drivers and economic fundamentals such as "containerized traffic flows, transportation indices and consumer confidence" remain strong.
The sector had healthy leasing activity from both traditional users and e-commerce, fueling rent growth. Rents jumped 5.1% in Q3 compared to a year ago and more than 40% of the country has reported double-digit rent gains.
Cushman & Wakefield Logistics & Industrial Services for the Americas, lead John Morris anticipates industrial will continue to outperform the real estate market and the economy. In terms of development, 59.6M SF came online in Q3, with 159M SF of total industrial product delivered in 2016.
Markets with the tightest vacancy rates in Q3 were predominantly in California and Georgia, such as Los Angeles (1.3%), Orange County (2.2%), San Jose (2.3%), Savannah (2.3%) and East Bay/Oakland (3%).
"Since late 2011...net absorption outperformed the economy," John says. "E-commerce, urbanization, last-mile, same-day delivery and similar phenomena...are busting older market paradigms, all to the benefit of the industrial real estate market."