Positive Absorption & Rising Rental Rates: The Streak Continues
- Average Industrial Rental Rate for Q3 2016 was $4.76 PSF for Warehouse
- Net Absorption for Q3 2016 was 915,695 SF for Mecklenburg County
- The North Submarket Made Up the Largest Portion of Absorption with 510,517 SF
- The Largest Transactions in Q3 2016 Included: Pactiv Renewal of 324,000 SF, Pinpoint Leasing 175,000 SF, Printful Leasing 99,927 SF and BIC Leasing 78,282 SF
The Charlotte Regional industrial market continues to build strength, rates continue to climb and sale prices keep increasing. Net absorption for Mecklenburg County during the quarter was positive 915,695 SF. This is less than second quarter of 2016, which had a positive absorption of 1,126,970 SF; however, third quarter absorption is still well above the average positive absorption of 510,517 SF recorded over the last three years. The North submarket made up the largest percentage of the positive absorption with 361,571 SF, followed by the South submarket with a positive absorption of 237,830 SF. Larger warehouse projects that were under construction in the third quarter 2016 include Trinity Partners Shopton Ridge, Scannell Properties Wilkinson Commerce Center and Liberty Property Trust’s CDC South as well as Shopton Ridge. The third quarters largest deals include Pactiv renewal of 324,000 SF, Pinpoint leasing 175,000 SF, Printful leasing 99,927 SF and BIC leasing 78,282 SF. The vacancy rate for the third quarter 2016 was 5.40% compared to 5.70% in the second quarter 2016. The average industrial rental rate was $4.76 per square foot for warehouse, which increased 4.42% from the previous quarter’s rate of $4.55 per square foot.
Industrial demand throughout the area continues to be high. The common theme in the market is still the lack of space in the 20,000 SF to 50,000 SF range and lack of outside storage / trailer parking. New leases included Printful in Westlake, BIC in Inner Loop, and both Crane Worldwide and MDX Group in Ridge Creek West.