The Portland industrial market continues to be strong despite softening from a few leading indicators. The overall market vacancy rate is 4.3 percent, which is up from 3.4 percent in the third quarter of 2018, while absorption during this period was 832,000 square feet. Historical absorption during the current cycle has averaged 3.8 million square feet. Almost 5 million square feet came on line in 2018, 2 million of which was speculative space that was 85 percent available in July 2019. This impressive amount of growth expanded the existing overall market size by 2.2 percent. Top tenants have been Amazon’s fulfillment centers, which occupy 918,000 square feet in the Rivergate Industrial Park in North Portland and 857,000 square feet in Troutdale. Both facilities were developed by Trammell Crow. Amazon also signed a lease in Hillsboro in 2016 for 303,000 square feet of space that was developed by Majestic. A United States Postal Service processing and distribution facility moved from a confined, central city location into 818,000 square feet in the Airport Way industrial area in Northeast Portland. Other large users include third party logistics, retailers/wholesalers and local market distributors. Intel announced an additional 1.5-million-square-foot expansion of its existing 2.2 million …
Across the Northeast, the high level of demand from retailers, food companies and transportation/logistics firms is outpacing the level of development and redevelopment in the industrial market, causing a severe shortage of product and skyrocketing rents across the region. At the center of this trend is New Jersey, situated in the heart of the Northeast’s Boston-Washington, D.C. corridor between Philadelphia and New York City. The demand for industrial space in New Jersey is driven by its strategic location and sophisticated infrastructure including air, freight, port and rail options linking it to the rest of the country. Despite the near-record level of development in the industrial sector, the state faces a product deficit that even the nearly 5.3 million square feet of space currently under construction cannot satisfy. In fact, 93 percent of the more than 21 million square feet that was developed in 2017 and 2018 has already been leased. Demand has pushed the average asking rent across the state to $8.41 per square foot, an all-time high. Moreover, asking rents are often not listed in new buildings or those under construction, many of which have rents as high as the low teens. Not listing the asking rents demonstrates how …
Demand for industrial space is roaring throughout the submarkets surrounding the Port of New York and New Jersey, propelled by the port’s handling of a record amount of cargo thus far in 2019. As a result of the healthy demand, as well as more product coming in and out of the port, landlords are enjoying positive rent growth accentuated by a limited supply of quality industrial space. The port experienced record growth in cargo volume handled during the first six months of 2019, according to internal data from the organization. The number of 20-foot equivalent units (TEUs) handled by the port has already exceeded 3 million for the year and surpassed 611,000 in June alone. This figure represents an all-time record for the port during the first half of the year, enabling it to surpass the Port of Long Beach for the first time in 20 years. Increasing amounts of inventory coming in and out of the port translates to greater demand for industrial space to store, process and ship product. But the port submarket has but a meager supply of real estate to meet the demand. Due to a limited space available for lease, the industrial submarket experienced negative …
Amarillo has continued on the path of steady growth with a strong unemployment rate of 2.7 percent. Along with its sturdy economy, Amarillo’s commercial market has followed a path of consistent advancement, but there are clouds on the horizon and hints of a stall are visible. Our core market indicators are showing cracks. There are fewer jobs now than there were a year ago. Commodities have been flat at best. Oil prices have experienced declines in excess of 10 percent from this time last year, with natural gas prices dropping nearly 25 percent from a year ago. Despite some early spells of ample moisture, recent heat and low rain totals have hurt Panhandle farmers and ranchers. The uncertainty regarding tariffs on these natural resources has created anxiety as well. For the city’s industrial and commercial real estate sectors, the collective message of these trends is that the long stretch of economic expansion that has propped up the market, may be in the rearview mirror. New Developments Some new land purchases with plans for industrial developments should help the tax base. Caviness Beef Packers recently purchased 100 acres with plans to build a new facility. In addition, the Amarillo Economic Development …
The San Diego industrial market is still thriving under sunny skies. The 146-million-square-foot industrial base is more than 95 percent occupied. Businesses continue to gobble up space even though rents have grown 6 percent to 8 percent annually since 2015. Though industrial markets around the country continue to do well thanks to a rapidly expanding logistics sector, San Diego’s industrial growth is broader based. Major contributions come from the defense, tech, electronics, cross-border commerce and biotech sectors. San Diego has several large submarkets, each with its own set of opportunities and challenges. South County, which includes Otay Mesa, has seen the strongest rent growth during the current economic recovery. Since the beginning of 2018, more than 591,000 square feet of state-of-the-art distribution space has been completed, with all but 45,000 square feet fully leased up. Recent transactions in Otay include a 198,000-square-foot lease to Zucarmex and the 174,000-square-foot expansion of US Joiner Trident Marine. The vacancy rate for South County stands at 4.33 percent, slightly under the countywide rate. Vacancy in North County is running somewhat higher at 6.72 percent. This is mainly due to recent deliveries in Carlsbad. A little more than 2.2 million square feet of new space …
The Dallas-Fort Worth (DFW) and Houston metro areas have vastly different opportunities and challenges in terms of commercial real estate. Yet this year both have both landed in the top five in the nation for industrial development. Driven by strong population and job growth, DFW and Houston don’t expect their industrial expansions to slow down any time soon. At the end of the second quarter, DFW was No. 2 in the country in industrial development behind California’s Inland Empire, with 30.3 million square feet of space under construction, according to Cushman & Wakefield research. Houston ranked fourth with 18.1 million square feet. Record Construction in Dallas Dallas’ industrial market has enjoyed strong positive momentum throughout 2019, thanks in large part to a steady stream of new residents and job opportunities. DFW’s population grew by 128,500 people year-over-year, an average of 350 new residents every day. The metroplex also gained 97,000 jobs over the previous year. Moody’s Analytics reported that 25 percent of those new positions were in the industrial market. The leading indicators of industrial demand are trade, transportation and utilities jobs, which account for nearly 75 percent of all industrial jobs in DFW. Unemployment has edged downward to 3.4 …
New Jersey’s industrial market continues to expand, driven by a plethora of industries, including retail, manufacturing, food companies, transportation and logistics. As the popularity of e-commerce shows no signs of abating, New Jersey has become a key location for distribution centers and last-mile delivery hubs to serve the entire Northeast region. E-retailers are scooping up available industrial space, taking advantage of New Jersey’s excellent air, freight, port, and rail infrastructure that links it to the rest of the region and the country. Increasing Demand After taking a slight breather during the first quarter of 2019, in part due to a lack of available high-quality space, total leasing activity has increased by 20 percent during the past three months, bolstered by more than 20 leases exceeding 100,000 square feet. Absorption was widespread, with occupancy level increases in 16 of 25 submarkets for both the quarter and year over year. In total, 2.4 million square feet of positive net absorption was recorded during the second quarter of 2019, the highest level since the third quarter of 2018. Moreover, occupancy levels increased by 8.6 million square feet during the past 12 months, the eighth consecutive quarter where more than 8 million square feet …
The St. Louis industrial market continues to rally after posting 22 straight quarters of positive absorption. Record leasing activity and historically low vacancy have put the region on pace to deliver another 6.5 million square feet of Class A industrial space in 2019. This is in a market that averages deliveries of approximately 2.5 million square feet annually. Current drivers engendering this industrial activity include the following. Discipline Developers in St. Louis have long been known for their disciplined approach to building. Vacancy in a stable market hovers near 7 percent for the region. The vacancy rate for industrial space leading into the third quarter was 5 percent, up slightly from the previous quarter, according to CoStar. Continued speculative development, particularly in the Metro East, added to the increase. This, coupled with a large vacancy left in Lakeview Commerce Center by World Wide Technologies as it shuffles into a new 2 million-square-foot facility in Gateway Commerce Center East, were the most evident culprits. Expect vacancy to uptick slightly again in the third quarter as speculative deliveries by NorthPoint Development at Gateway Tradeport along with Exeter in Gateway Commerce Center come online. E-commerce No discussion surrounding the industrial market would be …
Class A product is going off the market fast in Northern California’s industrial basin. Older product is sitting on the market longer, while mid-sized spaces are still the East Bay’s bread and butter. Net absorption has been pegged on a negative trend due to new construction and the volume of deals slowing down. Certain products are giving concessions to compete with newer product, while some landlords are trying to push the market limits to see how heavy tenant’s pockets really are. Several significant leases were signed in the East Bay during the second quarter of 2019. The largest deal of the quarter belonged to Service West, a furniture installer that signed a renewal and expansion totaling 252,021 square feet in San Leandro at 2350 Williams Street. Javelin Logistics, a logistics and distribution provider, also inked a new lease for 134,279 square feet at 7091 Central Ave. in Newark. Confluent Medical had the largest research and development deal of the second quarter, totaling 65,385 square feet. The material science tech company renewed at 47513 Westinghouse Drive in Fremont. The most significant investment sale of the second quarter occurred at 44100 and 44200 Osgood Road in Fremont. This is where Western Digital …
Until about six years ago, the Dallas-Fort Worth (DFW) industrial market was considered a second-tier market, lagging behind the likes of New York-New Jersey, Chicago and Los Angeles in terms of investor interest and demand. Today, the metroplex is not only holding its own with the traditional gateway markets, but in some cases surpassing them, thanks to growth from an exceptionally diverse group of tenants and industries. Natural population growth throughout North Texas has prompted stronger demand for industrial space across a range of user bases: e-commerce, global logistics, consumer products, building materials, pharmaceuticals, food, furniture, aviation. Some notable, six-figure leases that have been executed in the metroplex over the last 12 months and which reflect the diversity of tenant demand — as well as the geographic range of submarkets seeing strong activity — include the following: Smuckers (1.1 million square feet in south Dallas), furniture provider Steelcase (618,000 square feet in Carrollton), marketing firm Taylor Communications (232,000 square feet in south Dallas), ITW Food Equipment (184,000 square feet in Fort Worth), Alliance Glazing (137,000 square feet in Garland), Panoramic Doors (127,500 square feet in Fort Worth) and CEVA Logistics U.S. (100,000 square feet in Coppell). As these deals illustrate, …