The U.S. warehouse market is coming closer into balance after a long stretch when strong demand, driven by economic expansion and a push to build up e-commerce distribution networks, far outpaced available storage space.
The availability rate for U.S. industrial real estate, which has been plunging for years, dipped less than a hundredth of a percentage point in the first quarter, leaving it essentially at 7 percent, according to real-estate brokerage CBRE Group Inc.
Supply marginally outpaced demand in the first quarter across 55 U.S. regional markets, CBRE said in a report released last week. Developers completed roughly 33 million square feet of warehouse space, while aggregate net absorption — the net amount of space either newly leased or newly vacated — came to 32 million square feet, CBRE said.
The market for industrial space remains tight, however, with availability still at the lowest level it has been since 2000, suggesting retailers, logistics providers and manufacturers will continue to have a tough time leasing warehouse space, particularly in high-demand areas near urban centers.
“The relentless falling of availability kind of eased up in the first quarter,” said Richard Barkham, CBRE’s global chief economist and head of research for the Americas. But, “it’s a tight market where people will find it quite difficult to lease space. The plateauing is a very small crumb of comfort.”
Commercial real-estate services firm Jones Lang LaSalle Inc. said separately that its measure of the vacancy rate for U.S. industrial real estate ticked up slightly to 5 percent in the first quarter while rent growth slowed.
