The availability rate for U.S. industrial real estate declined by less than half of a basis point (bp) – essentially a flat result - in the first quarter as demand for warehouses roughly matched the delivery of newly constructed supply, according to a new report from CBRE.
The modest dip marks 35 consecutive quarters of declining availability, the longest since CBRE started tracking the data in 1988. Availability of U.S. industrial real estate registered 7.0 percent in the first quarter, the lowest point since 2000.
Over the past year, the availability rate is down 30 bps.
Preliminary data show that aggregate net absorption across 55 U.S. markets amounted to 32 million sq. ft. in the first quarter, matching construction completions of roughly 33 million sq. ft.
“Net absorption should pick up through the rest of this year in step with the economy,” said Richard Barkham, CBRE Global Chief Economist. “We expected a tepid start to the year, due in part to a weaker global economy and stock market turbulence at the end of last year. But the overall picture is a nicely balanced industrial sector, with demand and supply broadly in line.”
Mr. Barkham added that the industrial-and-logistics real estate sector continues to benefit from the ongoing structural shift to e-commerce and healthy levels of consumer spending.
CBRE defines availability as the sum of vacant space plus space that is currently occupied but otherwise being marketed for use by new tenants. In the first quarter, CBRE found 30 of the markets registering declines in industrial availability from the previous quarter, 26 reporting increases and eight remaining unchanged.
The full CBRE report is available upon request.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
