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U.S. industrial market nears full recovery
in Q2 2015
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*Arrows indicate change from previous quarter.
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| ECONOMY
U.S economy projected to grow despite slow Q1 2015
Growth in the U.S. economy slowed in Q1 2015, declining 0.2%, in large part due to the slowdown and subsequent backlog of cargo at the U.S. West Coast ports. However, a combination of factors, including faster than expected clearing of the aforementioned ports backlog and a significant narrowing of the trade deficit, bodes well for economic growth for the balance of 2015 with the Federal Reserve forecasting approximately 2% GDP growth for the year.
DEMAND
Leasing demand strong across the board
The U.S. industrial market expanded for the 21st consecutive quarter, logging 67.1 million sq. ft. of positive net absorption in Q2 2015. This figure was up a healthy 33%, from the relatively slow Q1 figure and up 20% year-over-year. All but two markets tracked by CBRE Research saw positive demand with 20 markets posting over 1 million sq. ft. of net absorption led by Chicago and the Inland Empire with 9.2 million sq. ft. and 6.6 million sq. ft., respectively.
SUPPLY
Construction activity expanding
A total of 36.5 million sq. ft. of new supply was added nationwide in Q2 2015, the second strongest quarter in the current cycle. Fifteen markets delivered over 1 million sq. ft. led by Chicago, Inland Empire, Houston, Dallas/Ft. Worth and Atlanta. It’s notable that nine secondary or tertiary markets delivered over 1 million sq. ft. in the quarter—a sign of the overall strength of the industrial market.
AVAILABILITY
Nationwide availability hits 9.8%—10 basis points from recovery
The U.S. availability rate shed 30 basis points (bps) quarter-over-quarter to break 10% for the first time since Q4 2007 and, at 9.8%, is only 10 bps above the previous cycle low. Availability declines were widespread with 77% of CBRE tracked markets at or below the Q1 2015 mark. Ft. Lauderdale, Walnut Creek, Boston and San Jose posted the strongest quarterly availability declines.
RENTS
Rents show slight growth in Q2 2015
The average net asking rent grew 0.5% to $6.04 in Q2 2015 and was up 3.4% year-over-year. Rents have grown in 17 of the last 20 quarters but are still 6% below the previous cycle high. Average rents were at or above the previous quarter in 75% of the CBRE Research-tracked markets during Q2 2015, with San Francisco Peninsula, Ft. Lauderdale and San Diego posting the strongest growth.
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Visit the Global Research Gateway
Valuation & Advisory Services Perspective
The confluence of a rebounding housing market, growing e-commerce and improving overall economic fundamentals continue to stimulate demand for industrial rents and sales. U.S. based CBRE Valuation and Advisory professionals performed almost 8,500 industrial appraisals in 2014 and nearly 2,500 already this year. We have real time information to address your industrial appraisal and consulting needs.
Visit www.cbre.com/Valuation for more information about CBRE Valuation & Advisory Services.
Meet CBRE's Industrial Valuation Team lead by Arleen Cassidy.
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Arleen Cassidy, MAI |
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U.S. National Industrial Practice Leader,
Managing Director
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+1 214 979 5673
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arleen.cassidy@cbre.com
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Thomas B. McDonnell, MAI,FRICS,CCIM |
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President, Americas
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+1 312 233 8669
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thomas.mcdonnell@cbre.com
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© 2024 CBRE Statistics contained herein may represent a different data set than that used to generate National Vacancy and Availability Index statistics published by CBRE Corporate Communications or CBRE's research and econometric forecasting unit, CBRE Econometric Advisors. Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the market. This information is designed exclusively for use by CBRE clients, and cannot be reproduced without prior written permission of CBRE.
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