Regional Industrial Market | Overview
- The regional vacancy rate remained at 6.4 percent during the last two quarters of 2017 as demand continued to keep pace with new supply.
- Annual absorption topped 23 million square feet, below last year’s annual total, but still above the five-year average.
- Asking rents increased by 3.9 percent for the year.
- Over 7.2 million square feet of speculative buildings and 4.9 million square feet of build-to-suit inventory was delivered in the last two quarters.
- Investors still have substantial resources available for acquisitions, but there were fewer investment grade offerings available.
The continued balance between supply and demand kept regional vacancy stable during the last two quarters of 2017. Twenty-five percent of the newly-delivered spec space was leased prior to completion. The lack of supply and demand build-up has resulted in a scramble for new building sites, both greenfield and infill. Class B and C buildings that have been chronically vacant are now being considered as viable options. Developers who have secured and are upgrading buildings are seeing strong demand for those assets.