No Slowdown Seen for US Industrial

Webb says industrial market indicators have continued to improve broadly across the US.

CHICAGO—Demonstrating the validity of the adage “a rising tide lifts all boats,” the industrial sector continues to go from strength to strength, a statement that includes markets where growth has slowed in other sectors. “Certainly, we’ve seen no slowdown in leasing activity since this time last year, and market indicators continued to improve broadly across the US,” says Earl Webb, president, US at Avison Young. “Even markets, such as Houston, that were cause for concern in 2016 because of volatile energy prices reported occupancy gains, robust deliveries and controlled new construction.”

Industrial vacancies across the US markets tracked by AY averaged 5.3% as of March 31, down from 5.9% a year earlier. In more than a third of the 41 markets on the firm’s radar, vacancies at the end of the first quarter were below historical averages, in particular San Mateo, CA (1.7%), Orange County, CA (2%) and Miami (2.8%). And all but two markets saw year-over-year triple-net asking rent increases, with the US on the whole averaging $6.97 per square foot, up 44 cents from the year-ago period.