Despite some predictions for a slowdown in 2H 2017, as we reported earlier this week the market for distribution space in the US remains very hot, according to Q3 analysis from real estate firms JLL and CRBE. (See Market for Warehouse Space Continues to Defy Gravity, with Rates Up and Vacancies Down again in Q3.)
CBRE, for example, found that demand for space exceeded supply for the 28th time in the past 30 quarters, with the industrial market's "availability rate" falling to 7.7%, the lowest level since all the way back in 2001. Meanwhile, the tight supply pushed net asking rents up by 1.6% for the quarter and 6.3% year-over-year to $6.88 per sq. ft. - the highest mark since CBRE began tracking this metric in 1989.
But of course, rates and availability vary dramatically by individual markets. The list below shows CBRE data for the top 60 metro markets, where that variability is easily seen.
Rates may average $6.88 per square foot nationally, but in the San Francisco area they are a hefty $30.56, $21.72 in nearby San Jose, and $12.12 in San Diego. Meanwhile, space is going for just $3.29 in Greenville, SC, and only $4.06 in Cincinnati, even though the area is a popular logistics hub.
Vacancy rates in Oakland are just 1.1%, with a number of markets under 5%. Amazingly in our view, none of the 60 markets has vacancy rates of 10% of more.
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