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Warehouse Absorption Decelerates, Stays in Positive Territory
Notwithstanding its continued sturdy fundamentals, the U.S. industrial sector has seen net absorption decelerate through the first three quarters of 2019, says NKF in its third-quarter report. The firm attributes the slowdown to a limited supply of top-quality product.
Q3 saw net absorption of 40.2 million square feet across 49 markets tracked by NKF, compared with 73.6 million square feet in the year-ago period. Fourteen of the markets tracked by NKF saw absorption of one million square feet or more during Q3, topped by the Inland Empire with seven million square feet. Another 13 saw negative absorption, led by Columbus.
That being said, NKF notes that vacancies remained near historic lows, averaging 5.1% at quarter’s end. Meanwhile, rents reached a cyclical high of $7.49-per-square-foot. NKF notes that rents have appreciated by around 6% year over year since Q3 2014, with the past two years seeing an acceleration.
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