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CST: 12/12/2019 05:56:54   

NEW CONSTRUCTION DELIVERIES STRUGGLE TO MEET TORRID DEMAND FOR INDUSTRIAL SPACE

124 Days ago

Strong Consumer Spending Keeps National Industrial Vacancy Rate Below 5%

HOUSTON, Aug. 09, 2019 (GLOBE NEWSWIRE) -- Transwestern’s latest national industrial report underscores that strong consumer confidence and moderate job growth continued to buoy the industrial sector in the second quarter of 2019. While new supply is outpacing leasing activity in some markets, other regions experienced a considerable rebound in net absorption after a slow start to the year, and 43 of 47 markets tracked by Transwestern posted year-over-year rent increases.

Nine markets ended the quarter with vacancy below 4% (Los Angeles, Orange County, Detroit, Inland Empire, Long Island, New Jersey, Minneapolis, Cincinnati and Salt Lake City). Only three of those – Inland Empire, Cincinnati and Salt Lake City – have a substantial volume of new construction in the pipeline, or more than 2% of their existing inventory. This suggests industrial owners and users are still looking for opportunities to build new, state-of-the-art industrial product.

“The U.S. has a record level of industrial space under construction – in fact, the volume is more than double that of five years ago,” said Matt Dolly, Research Director in New Jersey. “In more than half the markets Transwestern tracks, the development pipeline exceeds 3 million square feet. Still, remarkably, once new space is completed, it is quickly filled.”

Overbuilding, which affected sector performance in previous cycles, does not seem to be a threat due to labor challenges and rising land prices keeping construction in check. Additionally, tariffs and trade disputes will lengthen lead times and costs for construction materials.

Net absorption was positive for the 38th consecutive quarter, despite declining for the third straight period, ending the second quarter with 86.4 million square feet. Dallas surpassed the Inland Empire with the highest quarterly and year-over-year absorption totals due in large part to more available inventory. 

Dolly continued, “Demand for industrial space is expected to pick up nationally during the second half of 2019 as retailers fill their supply chains for the holiday shopping season.”

Download the Second Quarter 2019 U.S. Industrial Market Report at: http://twurls.com/us-industrial-2q19 

ABOUT TRANSWESTERN COMMERCIAL SERVICES
Transwestern Commercial Services (TCS) is a privately held real estate firm of collaborative entrepreneurs who deliver a higher level of personalized service and innovative client solutions. Applying a consultative approach to Agency Leasing, Asset Services, Occupier Solutions, Capital Markets and Research, our fully integrated global organization adds value for investors, owners and occupiers of all commercial property types. We leverage market insight and operational expertise from across the Transwestern enterprise, which includes firms specializing in development and real estate investment management. TCS has 34 U.S. offices and assists clients from more than 200 offices in 37 countries through strategic alliances with France-based BNP Paribas Real Estate and Canada-based Devencore. Experience Extraordinary at transwestern.com and @Transwestern.

ABOUT TRANSWESTERN
The Transwestern enterprise comprises diversified real estate services, investment management and development companies. The privately held, fully integrated organization leverages competencies in office, industrial, retail, multifamily and healthcare to add value for investors, owners and occupiers of real estate.

Stefanie Lewis
Transwestern
713.272.1266
stefanie.lewis@transwestern.com

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