U.S. Industrial Vacancy Drops for Sixth Consecutive Quarter
U.S. industrial continues to be the Energizer Bunny of commercial real estate, with the national vacancy rate falling for the sixth consecutive quarter to 3.4% despite an influx of new product, JLL reported. The competitive environment continued to place upward pressure on rents and the average asking rent climbed to $7.62 per square foot in the first quarter, a 16% annual increase.
Demand remained strong across the country as occupiers absorbed 110.8 million square feet in Q1, the third highest quarter for net absorption on record. On the leasing front, activity rose 17% year-over-year, which suggests upcoming quarters may bring even greater occupancy gains.
As in the past few quarters, logistics & distribution companies and 3PL providers have been the leading drivers of demand. “Investors anticipate robust property fundamentals will offset higher borrowing costs and inflation, further driving capital towards the sector,” according to JLL.
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces.
Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications.
Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).