- Atlanta - Increased demand from retailers and wholesalers is driving strong leasing and absorption with effective rents reaching a post-recession high at $3.02 PSF/year NNN. Demand in this market sparked 8.9 MSF of new big-box construction during the first half of 2016, compared to 6.1 MSF completed in all of 2015.
- Chicago - Wholesaler and e-commerce expansions are driving continued increases in big-box construction with 11.7 MSF under way in Q2 2016 to meet the need for modern distribution facilities.
- Dallas-Fort Worth - Anticipated activity from the 30 MSF of active tenants in this market will drive new development absorption in the region, which saw 9.5 MSF of big-box space completed in the first half of 2016 versus 9.7 MSF in all of 2015.
- Greater Los Angeles - A record-breaking 45 big-boxes, totaling 22.8 MSF, were added to the inventory this past year, bringing the total existing big-boxes in this market to 676, totaling 370.4 MSF—by far the most in North America.
- New Jersey/Lehigh Valley/Eastern PA - Demand from logistics and e-commerce users has propelled this market to emerge as one of the most robust in the country. Big-box leasing activity has more than doubled between Q2 2015 and Q2 2016. During the first half of 2016, a total of 18.4 MSF was leased, the most for a core North American market.
- Toronto - Construction activity continues to grow, despite a slow start to 2016. Developers are bullish on this market with just under 6 MSF of big-box space under way.
Key takeaways from Colliers' Q2 analysis of the broader industrial market include:
- Vacancy rates declined in 84 percent of the markets Colliers tracks. At mid-year only 6 percent of the nation's industrial space is vacant, the lowest on record. Vacancies dropped despite 63 MSF of new supply completed in Q2, breaking the previous record of 60 MSF set just last quarter. Also, more than 77 MSF was absorbed, surpassing the previous record of 72 MSF in Q2 2015.
- New construction reaches record levels. With a record 204 MSF now under construction, development is not likely to ease any time soon as low vacancies continue to drive development across the country.
- Strong leasing and lower vacancies, especially in modern class A distribution centers, drove up asking rents in Q2 to $5.66 PSF/year, an all-time national record for the country. Asking rents for distribution space increased year-over-year in 87 percent of the markets Colliers tracks.
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For further information, please contact:Margaret MeluzioHavas PRPhone: 646-510-6578Email: Margaret.Meluzio@havasww.com