The Inland Empire recorded the highest overall industrial absorption figures out of all markets nationally for the first half of 2018, according to a report released by a representative of Colliers International. The market saw 14.4 million square feet of industrial absorption between January and June this year, the report shows.
The high absorption rate highlights “continued robust interest for modern distribution centers in the top e-commerce distribution market in the country,” according to the source. Other strong absorption markets nationally for this time period were Chicago at 10.6 million square feet, Dallas-Fort Worth at 7.9 million square feet, and Atlanta at 7 million square feet, the report says.
Demand for industrial space in core markets is partially credited for strong industrial leasing numbers nationally, according to the source. And while the western region of the country can thank the Inland Empire for its record activity, the South had the greatest net absorption regionally in the country for the first half of the year at 43 million square feet, taking 34 percent of the national total even though it houses only 31 percent of the existing stock, Colliers reports.
In addition to strong absorption, the national industrial sector is seeing a healthy amount of development, record-low vacancy rates, and record-high asking rents. The source reports that the national industrial vacancy rate dropped to an all-time low of 5 percent during the first half of the year, despite more than 64 million square feet of new supply completed in the second quarter of 2018. “Look for vacancies to remain at record lows for the remainder of 2018 despite a further uptick in new construction,” the representative says.
Meanwhile, robust industrial absorption can also be seen in other parts of SoCal. As SoCal Real Estate recently reported, according to a report from a representative of Cushman & Wakefield, the San Diego industrial market saw 632,000 square feet of positive net absorption between April and June, an amount much higher than the previous two quarters combined and among the highest levels the market has seen during recent years.
See Colliers International’s top 30 markets for industrial absorption in the U.S. during the first half of 2018, below.