Port markets led the country when it comes to in-place rent growth this year, with the Inland Empire and Los Angeles charging ahead of the pack.
In-place rents in the Inland Empire have grown 11.6% over the last 12 months, while rents grew by 9.7% in Los Angeles, by 7.6% in Orange County and by the same amount in Phoenix, according to CommercialEdge. In Boston and New Jersey, rents have grown 8.9% and 7.2%, respectively.
"In recent months, the Port of New York and New Jersey became the busiest in the nation by number of containers handled, moving up from its long-held third spot," CommercialEdge analysts note in a new report. "While the combined number of containers between the two Southern California ports still dwarfs other regions, the shift is notable. We expect demand to continue to grow in the region around the Port of NY & NJ, propelling growth in not just New Jersey but also Allentown-Bethlehem and Scranton-Wilkes-Barre."
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Vacancy is also lowest in port markets, though non-port markets with a heavy logistics presence see low levels of available space as well. Examples include Nashville (1.4%), Columbus (1.6%), Atlanta (2.3%), Indianapolis (2.5%) and Kansas City (2.7%), all of which have sub-3% vacancies.
Nationally, the vacancy rate clocked in at 4% in October, down 10 basis points from the previous month.
It's not all sunny for port markets, however: the National Retail Federation is projecting lower port volumes as many retailers stocked inventories early in preparation for the holiday shopping season. Shipments are also expected to slow as the overall economy slumps according to experts from Cushman & Wakefield.
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