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Industrial New-Lease Count Returns to Historical Peak
The U.S. industrial new lease count index has returned to its historical peak, while the renewal index has fallen, according to data from CoStar Group. Large tenants have led new-lease recovery, as the index for leases of 200,000 square feet or more has climbed to 92% of its peak, while the 50,000 – 199,999 square-foot segment has recovered to about 90%.
Smaller tenants remain closer to previous leasing highs, with all categories below 50,000 square feet standing at roughly 91-98% of the peak. However, momentum has begun to level off in several size ranges.
“While new leasing activity has recovered, it does not translate one-for-one into net absorption,” said Juan Arias, national director of industrial analytics at CoStar Group. “Relocations and weaker renewals can leave space behind, meaning recovery will also be influenced on how quickly landlords can backfill existing buildings. Nationally, demand is extending beyond the newest warehouses into older buildings larger than 500,000 square feet, while midsized buildings still face excess supply and elevated competition for tenants.”
Pictured: Building 2 at Southport Logistics Center in Wilmer, TX, where Logistics Plus leased 744,452 square feet in August.
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