The US industrial real estate market continued its progress in the first three months of 2014. Rising rental rates, declining vacancies and robust absorption were all noted, according to Cushman & Wakefield’s (C&W) newly-released research findings. Supply was down in several markets, which was a factor in the leasing slowdown in Q1, but developers have increased development of industrial assets to meet strengthening demand.
According to the firm’s John Morris, the first quarter performance continued the “notable progress industrial real estate experienced in 2013.” Domestic manufacturing continued to perform well and electronic fulfillment also continued to gain traction in the market. The economic environment in the sector was the most positive that it had been in several years.
Industrial property occupancy increased year on year. The national industrial vacancy rate ended the quarter at 7.4%, 80 basis points lower than one year ago.
Developers in Dallas/Fort Worth led the market in terms of construction, with California’s Inland Empire coming in second with 16.5 million sq ft and 14.8 million sq ft of total volume, respectively. In Dallas/Fort Worth 14.4 million sq ft of the total construction work is speculative.
C&W says that it expects developers to complete 85.8 million sq ft by the end of 2014, and 51.7 million of that will be speculative development.
