The U.S. industrial market continues to improve, posting lower vacancies, robust occupancy gains, and a record amount of new construction to quench increased demand from occupiers looking to modernize and improve their logistics capabilities. This led to a 1.5% increase in asking rents compared with the previous quarter.
The rapid increase in new supply does warrant some caution. Post-recession, developer discipline kept speculative construction in check and absorption significantly higher than new supply. The trend could reverse in upcoming quarters. Now over 185 MSF is under construction, the majority of it speculative. The good news is over 40% of the product under construction is located in markets with robust occupancy gains including Dallas (12.9%), Inland Empire (8.7%), Atlanta (6.9%), Houston (6.6%), and Chicago (6.2%).
Source : Colliers International