Report | United States Industrial Outlook - Q4 2015
At 6.4 percent, vacancy is at a 15-year low and Class A warehouse space remains limited. At the same time, there continues to be a healthy pipeline of tenants in the market. As a result, developers are breaking ground on more speculative product in many markets. By year-end 2015, under construction spec projects totaled 115.0 million square feet, up 25.0 percent from one year ago (92.0 million square feet).
However, steady leasing activity should keep up with and slightly outpace new construction in most markets over the course of 2016; enough that the national vacancy rate is expected to drop closer to 6.0 percent, leading to warehouse rent growth of 4.5 percent. Although many leading economic indicators were strong in 2015, some variables - such as a slowdown in global demand - may affect the property segment in 2016.
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