February 27, 2018
Houston – Transwestern reports the industrial real estate market had another banner year, based in large part to consumer confidence, which hit a 17-year high in December. According to the company’s year-end national industrial report, the U.S. market witnessed its eighth consecutive year of growth in 2017, marking 31 consecutive quarters of positive absorption and 29 consecutive quarters of declining vacancy.
“Last year, Dallas/Fort Worth, the Inland Empire and Atlanta each had absorption exceeding 20 million square feet,” said Ryan Tharp, Research Director in Dallas. “This robust activity was echoed nationally and continues to drive demand and boost rents.”
Ports set records for container volumes as e-commerce grew to 9.1 percent of retail sales by the end of 2017, up from 8.2 percent the prior year. Three of the largest transactions completed in the fourth quarter were in the nation’s leading port markets: In the Inland Empire, Walmart and Solaris Paper took 1 million square feet and 862,000 square feet, respectively, and Best Buy signed for 725,000 square feet in New Jersey.
“What is remarkable about the current 5.9 percent vacancy rate is that it has been cut in half since the fourth quarter of 2010, despite 873 million square feet of new development during the same period,” said Matthew Dolly, Research Director in New Jersey. “Nationally, we’ve experienced four consecutive years of at least 200 million square feet of positive absorption.”
However, as the report reveals, new starts continue to decelerate, with only 84.4 million square feet under construction, the lowest level since second quarter 2013. This could lead to a plateau in vacancy for the coming quarters.
“In the current environment, especially in markets that are facing a scarcity of developable land, clients are turning their attention to redevelopment and renovation,” Dolly said.
Download the national industrial market report at: http://twurls.com/4q17-us-industrial
Transwestern is a privately held real estate firm of collaborative entrepreneurs whodeliver a higher level of personalized service – the Transwestern Experience. Specializing in Agency Leasing, Tenant Advisory, Capital Markets, Asset Services and Research, our fully integrated global enterprise adds value for investors, owners and occupiers of all commercial property types. We leverage market insights and operational expertise from members of the Transwestern family of companies specializing in development, real estate investment management and research. Based in Houston, Transwestern has 35 U.S. offices and assists clients through more than 180 offices in 37 countries as part of a strategic alliance with BNP Paribas Real Estate. Experience Extraordinary at transwestern.com and @Transwestern.