McAllen Industrial Healthy, Despite Negative Absorption

The McAllen, TX industrial sector experienced negative absorption in Q2 2018, with 7,891 square feet coming back onto the market. However, according to researchers at CBRE, McAllen industrial remains healthy, with vacancy at 3.5% and approximately 585,000 square feet under construction.

Seven leases were signed during the quarter, as was a renewal, with 500,000 square feet of lease and sales deals transacted. This was double the velocity of Q2 2018, and quadruple that of Q1 2018.

The CBRE researchers pointed out that user demand did decline, but remains above the 15-quarter trailing average. Both demand and market activity continue to be driven by the transportation/distribution-logistics-3PL sector, which accounted for 20% of the total space requirements in Q2.

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