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Q2 Industrial Report: Strong Demand, Development Roar On
CBRE and Lee & Associates released their Q2 2017 Inland Empire market reports and both echoed similar sentiments. The industrial market is exhibiting strong demand, albeit a lack of inventory.
The report from CBRE notes there was rejuvenated interest in big-box industrial facilities, which accounted for 75% of Q2 total gross activity. The Inland Empire East benefited the most with gross activity peaking at 4.4 million square feet. CBRE researchers found that newly delivered pre-leases accounted for nearly two million square feet of net absorption during Q2 2017.
Lee & Associates’ Q2 report noted that even with a lack of inventory, the market still posted strong activity and gross absorption. Gross quarterly activity was 6.2 million square feet, with investment purchases and lease renewals accounting for 36.7% of the total.
Lee’s report noted overall gross activity will only be constrained by supply, while there are more small development projects delivering in the next six to 12 months, there is still a lack of supply. The under construction base for Q2 represented 15.2 million square feet, with 85.1% of the total in the 200,000-plus square feet range, a 2.8% decrease over the previous quarter.
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