Q1 Industrial Real Estate Report
After a very strong 2015, the first quarter of 2016 seems to be a continuation of the trend of high net absorption. Net absorption was 900,732 square feet in the first quarter of 2016, a bit higher than in the first quarter of 2015, and much higher than in the fourth quarter of 2015.
The renaissance in industrial construction – or more properly warehouse/distribution construction – was in full swing, with the market’s inventory increasing by almost 1 million square feet. Of course, every silver lining has a cloud, and the cloud this quarter was the completion of a large speculative building without pre-leasing. The addition of more than 400,000 square feet of new, empty space sent vacancy up a tenth of a point to 5.6 percent. This minor increase in vacancy did not dampen the weighted average asking rate, which increased to $0.65 per square foot (psf) on a triple net (NNN) basis.