United States Industrial Outlook – Q2 2021
Unparalleled demand and fundamentals in the industrial market persist as space and land become more scarce.
The Industrial silos continues to be the darling of commercial real estate. On the leasing front, things are moving so quickly that buildings are not sitting idle or vacant for long. Availability in the market is extremely tight, with all time low vacancies and new market high rents. While steel shortages and fluctuating prices continue, it has had minimal impact on the construction pipeline. As port dwell times have gone down, rail trail times have started to go up, with the lack container storage space being a bottleneck. Now more than ever, Urban Logistics has been on the forefront, and demand for Third Party Logistics companies to manage the distribution, warehouse, and fulfillment of goods has become essential to keep up with consumer shopping habits.
Market performance categories
Leasing: Industrial leasing is very strong, this quarter over 122.6 million s.f. of industrial product was leased.
Rental Rates: The U.S. Industrial rents were among the highest on record this quarter, hitting $6.62 p.s.f. with year-over-year rents increasing at a 5.1% rate.
Net Absorption: Increased leasing in 2020 contributed to accelerated occupancy of logistics space thereby pushing net absorption to a record high of 107 million s.f. this quarter.
Vacancy: This quarter vacancy fell below the 5% threshold to 4.8% and was one of the lowest on average
Under Construction: This quarter over 69 million s.f. was delivered, with 408.6 million s.f. currently under construction. Preleasing rates for all new industrial product is at an all-time high with over 61.3% already leased.