Positive net absorption streak continues, rents climb

  • The U.S. industrial & logistics (I&L) sector continued to demonstrate strong fundamentals in Q3, with 61.5 million sq. ft. absorbed versus 49.9 million sq. ft. delivered. The overall availability rate declined by 10 basis points (bps) in Q3 to 7.1% and the vacancy rate declined to 4.3%, down 10 bps year-over-year.
  • New supply in Q3 totaled 49.9 million sq. ft., down slightly from the previous quarter and 17.5% less than a year ago. Year-to-date deliveries are down from 2017 levels, as speculative development has been restrained. The under-construction pipeline grew 6.1% quarter-over-quarter to 275.4 million sq. ft.
  • With demand exceeding new supply, net asking rents increased 1.7% in Q3 to $7.21 per sq. ft. —the highest level since CBRE began tracking the metric in 1989.
  • The major drivers of supply-chain demand—consumer spending, business inventories and industrial production—all are showing measured growth this year. This is especially positive for the I&L sector, as consumer spending drives demand for logistics space.