Demand remains strong as fundamentals continue to break records across the board.
May 05, 2022
Despite a hearty influx of new deliveries, the national vacancy rate fell for the sixth consecutive quarter to 3.4%. The competitive environment continued to place upward pressure on rents and the average asking rent climbed to $7.62 p.s.f. Demand remained strong across the country as occupiers absorbed 110.8 million s.f. in Q1, which is the third highest quarter for net absorption on record. On the leasing front activity ramped up which suggests upcoming quarters may bring even greater occupancy gains. As in the previous few quarters, Logistics & Distribution companies and 3PL providers have been the leading drivers of demand. Investors anticipate robust property fundamentals will offset higher borrowing costs and inflation, further driving capital towards the sector.
Market performance categories
Leasing: Overall leasing volume increased 17% year-over-year. Logistics & Distribution companies and 3PL providers have been the leading drivers of demand.
Rental Rates: Rents were reported at $7.62 p.s.f. Since Q1 2021 rents have grown by 16%.
Net Absorption: Over 110.8 million s.f. was absorbed in the market in Q1.
Vacancy: Vacancy fell for the sixth consecutive quarter to 3.4%.
Under Construction: Developers delivered 90 million s.f. of new inventory in Q1. There is currently 531 million s.f. under construction.
