The McAllen Industrial Market registered positive net absorption despite dwindling availability and a lack of speculative development. 2019 Q3 year-to-date net absorption was higher than the combined 2017 and 2018 Q3 year-to-date net absorption.
Quarter-over-quarter, the market-wide vacancy rate dipped by 30 basis points (bps) and fell from 2.8% in Q3 2018 to 1.3%, a new record low. The Class A vacancy rate ending the quarter at 2.0%, declining by 70 bps quarterly and by 40 bps annually, ending the quarter at 2.0%, the lowest Class A vacancy rate seen in the market.
The market-wide, Class A, and Class B warehouse and manufacturing asking rates fell quarter-over-quarter but remained at historically high levels. Year-over-year, Class A asking rents grew by $0.23 per sq. ft., Class B by $0.50 per sq. ft., and the market-wide rate grew by $0.56 per sq. ft.
The quarter closed with users seeking 1.7 million sq. ft. of space. This is 590,000 sq. ft. more than total available sq. ft. and five times more than total vacant sq. ft. in the market.