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Supply Chain Graphic of the Week: US Distribution Center Real Estate Market Remains Red Hot

 

Vacancy Rates Down to Just 5.8% Nationally; Four Metro Markets are Especially Sizzling

Nov. 11, 2016
SCDigest Editorial Staff

Whatever the state of the overall US economy really is right now, there is no question it is smoking hot in the market for warehouse and distribution center space.

 

The Q3 market "snapshot" that was recently released by real estate firm JLL (the former Jones Lang Lasalle) includes the following graphic, which quickly tells the tale:

 

US Market for DC Space Still Red Hot in Q3 2016

 

Source: JLL

 

US developers have opened up an amazing 151 million square feet of DC space through Q3, and such space was up 5.5% in Q3 versus Q2. Nationally, vacancy rates were down to a very low 5.8%, and in the low single digits in extra hot markets such as in Southern California.

 

Not in this chart but in the Q3 snapshot report: more than one-third of all net "absorption" (basically how space is leased or acquired) is from just four metro markets: Chicago (6.4% of total US absorption), Houston (8.5%), Dallas-Ft.Worth (8.6%), and Philadelphia-Harrisburg (10.5%).

 

All that means lease rates are almost certainly headed up again. We'll get more details when the full Q3 reports from JLL and other brokers are released soon.

 

Any Feedback on our Supply Chain Graphic of the Week? Let us know your thoughts at the Feedback section below.

 

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