#60 – Inside Our Industry – U.S. Industrial Posts Absorption of 100M+ SF for Third Straight Quarter
Posted on | Inside Our Industry
One of the key metrics that we look at to gauge what types of development we expect to see in the future is the net absorption of industrial space. This simply means how much space is occupied and how much space is available for development. From an Agracel perspective, when occupancy rates are high, we expect to see more build-to-suit activity. Transwestern Real Estate Services posts a quarterly report that contains a wealth of information for the industrial development industry. Below is a posting from connectcre.com that outlines Transwestern’s most recent report.
U.S. Industrial Posts Absorption of 100M+ SF for Third Straight Quarter
U.S. industrial continues to prosper during the pandemic, posting 102.2 million square feet of positive net absorption for the third consecutive quarter, according to Transwestern’s second-quarter U.S. industrial market report. Markets leading net absorption in both Q2 and year over year include Atlanta, Chicago, Dallas-Fort Worth and the Inland Empire.
Additionally, the national vacancy rate dropped to 5.2%, its lowest level since the pandemic began, helping drive average rents up to $6.96 per square foot. At midyear, seven out of 44 markets saw vacancy below 4%, including Greensboro, Inland Empire, Los Angeles, Nashville, New Jersey, Orange County (California), Raleigh-Durham and San Jose-Silicon Valley.
“The industrial sector is once again firing on all cylinders, making it increasingly difficult to find suitable space in prime industrial markets,” said Matt Dolly, research director at Transwestern. “High rents and supply chain issues are making secondary logistics markets increasingly attractive to occupiers and investors.”