Last month, Cushman & Wakefield reported that U.S. industrial markets absorbed 63.6 million square feet (5.9 million sq m) of space in the final quarter of 2016, which propelled net absorption for the year to a record-setting 282.9 million square feet (26.3 million sq m).
According to the company, the U.S. industrial vacancy rate for all product types continued to decline in the fourth quarter, falling 30 basis points (bps) from the prior quarter and 100 bps from the prior year to 5.5 percent. Over the past year, logistics-related warehouse vacancy has declined 130 bps, from 6.9 percent to 5.6 percent, despite the delivery of 156.8 million square feet (14.6 million sq m) of new speculative product.
On the development front, 232.9 million square feet (21.6 million sq m) of industrial product was delivered in 2016, with 73.6 million square feet (6.8 million sq m) of it coming online during the fourth quarter. Currently, there is 215.6 million square feet (20 million sq m) of industrial product under construction.
In the fourth quarter of 2016, the top ten strongest markets in terms of demand for industrial space were Dallas/Fort Worth, with 5.3 million square feet (492,400 sq m) of net absorption; Chicago, with 4.1 million square feet (381,000 sq m); Houston, with 4.1 million square feet (381,000 sq m); California’s Inland Empire, with 3.6 million square feet (334,400 sq m); Atlanta, with 3.5 million square feet (325,200 sq m); Memphis, with 3 million square feet (278,700 sq m); Stockton/Tracy, California, with 2.5 million square feet (232,300 sq m); Nashville, with 2.5 million square feet (232,300 sq m); the Pennsylvania I-81/I-78 Distribution Corridor, with 2.3 million square feet (213,700 sq m); and Columbus, Ohio, with 2.1 million square feet (195,100 sq m).
Among the tightest markets in terms of overall vacancy included Los Angeles, at 1.4 percent; Orange County, California, at 2 percent; East Bay/Oakland, at 2.9 percent; Nashville, at 2.9 percent; Indianapolis, at 3 percent; Savannah, at 3 percent; Santa Clara County/San Jose, at 3.3 percent; Stockton/Tracy, at 3.4 percent; Charlotte, North Carolina, at 3.6 percent; and Seattle, at 3.8 percent.
