By Jason Tolliver, Americas Head of Industrial Research
According to our Year-end 2015 MarketBeat Report, solid economic fundamentals spurred
strong demand for warehousing and distribution space, which helped produce net absorption high enough to place 2015 among the strongest years ever for the industrial market. Brisk leasing velocity and tight vacancy continued to put upward pressure on industrial rents in most markets, with appreciation strongest in primary industrial hubs and secondary distribution markets. Over 75% of all markets saw rent increases in the fourth quarter, with 15 markets recording double-digit gains and more than half experiencing year-over-year growth of at least 5%. Supply has not overpowered demand as industrial vacancy is tracking at a 15-year low.
Space demand, rent growth and construction remain strong, and active tenant requirements should bring about solid net occupancy gains in 2016 for the industrial market. The anticipated increase in consumer spending also bodes well for future demand. Consequently, net absorption will continue to outpace new development for at least one more year, vacancy will continue to tighten, and rents will continue to appreciate in most markets.
For more information about 2015 and our expectations for the 2016 industrial market, download the full report here.
Jason is a commercial real estate economist and attorney with nearly two decades of experience in regional, national and international economic development, law, and market research. As Americas Head of Industrial Research for Cushman & Wakefield, Jason oversees the firms industrial-related thought leadership and routinely advises clients on macroeconomic factors and regulatory issues affecting industrial real estate.
Be sure to follow Jason @TolliversTake for his latest Industrial insight.