Although there are millions of square feet of new construction being developed in the industrial sector, the vacancy rates nationwide are tight, documented at 5.8% by JLL. Markets experiencing the greatest occupancy include Orange County and Los Angeles at sub-2% vacancy, but port cities like Miami and Seattle are also experiencing double-digit declines.
With the uptick in demand for warehousing space, thanks to the likes of e-commerce and increased shipping, industrial developers like Prologis are thinking, outside (or maybe UPside) the box. Next year, Prologis will break ground on a 3-story, 580,000 square-foot warehouse near downtown Seattle. Both Asia and Europe are already familiar with multiple-storied warehouses, but this is the first building of its kind in the United States.
What remains to be seen is if other developers will follow suit, and begin construction on creative, space-optimizing warehouses to make up for the strong demand for space in the industrial sector.
For comments, questions or concerns, please contact Daniella Soloway
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