Industrial Real Estate Market Hits New Highs, Transwestern Report Says
The US industrial real estate market set new records in the third quarter, posting the biggest quarterly growth jump since 2008 with a net absorption of 158.8 million square feet, said Transwestern Real Estate Services.
By another measure, the past four quarters together marked the first time in history that occupancy has increased by more than 500 million square feet year-over-year, with a high sea line of 540 million square feet of net absorption, the Houston-based company said in its quarterly report on the US industrial market.
This report mainly includes property types including Warehouse, Distribution Center, Truck Terminal, Food Processing, Manufacturing, Cold Warehouse, and Flexible Buildings.
These sectors also combined to set a record for the first time, the average asking rent for industrial space in the United States exceeded $ 7.00 per square foot. Asking rents rose to $ 7.11 per square foot in the third quarter from $ 6.98 the previous quarter, with more than a third of the 44 markets tracked recording double-digit year-over-year percentage growth. ‘other.
At the end of the year, that strong growth could be slowed by well-known supply chain delays and product shortages that make many items hard to find, said Transwestern Research Director Matthew Dolly , in a press release.
âThe fourth quarter will further test the resilience of the industrial sector as ongoing supply chain issues will be exasperated during what is expected to be a strong holiday spending season and could slow new and ongoing industrial projects,â said Dolly. “It is likely that e-commerce activity will only intensify in the coming quarters, increasing the attractiveness of properties in regions traditionally considered secondary industrial markets.”
But the market could roll these problems thanks to its powerful momentum. There are currently 636.6 million square feet of industrial space under construction nationwide, nearly double the volume of five years ago. About 27% of this space is concentrated in six markets: Dallas, Phoenix, Atlanta, Inland Empire, Chicago and Philadelphia. Measured as a percentage of existing stock, the construction pipeline signals future expansion heavily concentrated in the Sunbelt, Transwestern found.
The #industrial the market goes down in history as the third quarter saw the strongest quarterly growth since 2008 with a net absorption of 158.8 MSF.
– Transwestern (@Transwestern) November 16, 2021