Demand still outpaces supply when it comes to industrial real estate throughout the United States. But Cushman & Wakefield researchers say that the demand/supply imbalance in this sector is starting to narrow.
Cushman & Wakefield recently released its mid-year 2015 industrial report. The numbers in it offer yet more evidence that the U.S. industrial market remains a hot one.
“Strong industrial fundamentals can be found across the nation, with e-commerce retailers and logistics companies propelling our sector’s progress,” said John Morris, leader of Cushman & Wakefield’s Industrial Services Group, in a statement.
A total of 35 of the 38 industrial markets tracked by Cushman & Wakefield posted positive industrial absorption in the second quarter of the year. Vacancy rates continued to fall, too, to 6.6 percent overall for the country. This is 60 basis points lower than during the second quarter of last year, and ranks as the lowest the industrial vacancy rate has been since the first quarter of 2001.
Not surprisingly, the low vacancy rate is helping to drive up industrial rents. Cushman & Wakefield says that U.S. warehouse rents at an average of $5.17 a square foot are up 3.7 percent in the second quarter of this year when compared to the same quarter one year earlier. Cushman & Wakefield predicts that they will grow 5 percent by the end of this year and by more than 10 percent during the next three years.
Developers have been busy in this sector. According to Cushman & Wakefield’s report, construction crews have built 55.8 million square feet of new industrial space this year, 30.2 percent higher than during the same period in 2014. What’s most interesting is that speculative construction accounted for 61.8 percent of this new construction.
Construction activity continues, with 105.7 million square feet of industrial space under construction today.