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Industrial development strikes the delicate balance of supply and demand

  • ​Coming out of the recession, developers were hesitant to jump into planning any new developments despite the strong demand and interest in the region. However, as space was being absorbed at unprecedented rates and the legalization of marijuana brought with it the “Green Rush,” there was little opportunity for growth and expansion in the industrial sector.
  • Developers heeded the call of demand and met it with a record level of new construction deliveries. Since 2012, over 12.3 million square feet has been added to inventory with 14.2 million square feet absorbed. 2014 recorded the second lowest vacancy rate in history, slowly creeping up 100 basis points since then to a healthy 4.2 percent.
  • There has yet to be much speculation of an overbuild here. In fact, there is still another 2.9 million square feet expected to deliver by year-end; 2.0 million square feet of that is already accounted for in preleasing, primarily by Amazon’s 1.0 million square foot fulfillment center. New supply and absorption will likely end the year at an almost even balance, indicating developers are listening closely to the changing needs of the market.​​

Source: JLL Research

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