California’s Inland Empire
Regarded as one of the most robust markets in the United States, the Inland Empire is a real estate leader. The Inland Empire is a region in Southern California consisting of cities in the western Riverside County and southwestern San Bernardino County. With roughly 4.3 million people in the Inland Empire and more than 27 colleges and universities, we see lower housing costs and inexpensive land prices. Not to mention, 15 million square feet of construction is underway. Vacancy was at 5.5 percent in the first quarter of this year. Weighted asking rent is at $5.90 per sq. ft.
Portland’s demand for industrial space is well above the current supply. Until more product joins the market, rental rates will most likely continue to rise. Industrial space availability in Portland is at 5.6 percent. Tenants looking for larger spaces (250,000 + SF) are going to have trouble, as the options out there are scarce right now.
Weighted asking rent is at $5.16 per sq. ft.
Denver is seeing healthy growth in the first quarter of 2016. The vacancy rate has decreased to 4.1 percent. But, be on the lookout for these rates to increase with nearly four million square feet of construction in the works. Weighted asking rent is at an all-time high of $7.29 per sq. ft.
Dallas-Fort Worth has been having a construction boom. Over 4 million square feet was delivered to the market and 20 million is still under construction. Of the 20 million square feet of construction, 34 percent was pre-leased at the end of the first quarter 2016. Weighted asking rent in the market if $4.33 per sq. ft. and the average of availability in the market is 9.7 percent.
The industrial market is seeing good performance in 2016 so far. Vacancy is dropping and expected to reach 10.1 percent for 2016. Availability is at 12.4 percent and weighted asking rents are at $7.20 per sq. ft. Leasing activity is looking good in the second quarter, especially with the larger spaces. Leases signed for 50,000 square feet spaces and larger doubled from the first quarter to second. Rents continue to rise for industrial space as the tenant demand rises.
Chicago is on fire. According to CBRE, industrial availability in the city is at 6.6 percent and the weighted asking rent is at $4.75 per sq. ft. There is currently a total of 11.1 million square feet (38 projects) of development projects underway in the Chicago industrial market. The first quarter saw 5.8 million square feet of construction completed, and of that 57% were build-to-suit projects.
The year started strong with over 2 million square feet of new industrial buildings added to the Miami inventory. Vacancy is expected to reach 4.9 percent this quarter and weighted asking rent is $5.56 per sq. ft. The strength of the market is also evident by the vacancy rate which is projected to reach 4.9 percent this quarter.
Charlotte, North Carolina
The Charlotte industrial market stays strong with the average rental rate at $5.14 per square foot, which was an increase from the prior quarter rate of $4.78 per square foot. The vacancy rate in the first quarter was 6.90 percent, compared to 6.40 percent in the prior quarter. There seems to be a lack of buildings in the 20,000 to 50,000 square feet range and also a lack of outside storage and trailer parking.
Northern New Jersey
There is a rising tenant demand in Northern New Jersey. The Port of New York and New Jersey are attracting companies to the region, being this is the starting point for goods coming into Manhattan. Weighted asking rent in this market is at $6.72 per sq. ft.
The Philadelphia industrial market is driven by construction activity right now. Vacancies are at an all-time low at 5.6 percent with a weighted asking rent of $4.52 per sq. ft. Speculative construction accounts for 79.4 percent of all construction projects underway. Two of the four largest lease signings so far in the Philadelphia market in 2016 are e-commerce occupiers. E-commerce occupiers are growing in the market and something to look out for.