Industrial Boom: How The 14 Largest Big-Box Industrial Markets Are Faring This Year
September 19, 2017 Champaign Williams, National Editor
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Industrial real estate is the cream of the crop of America’s commercial real estate market, setting records across the board in 2016, from rent growth to net absorption — and research shows 2017 is keeping pace.
Pixabay Big-box industrial properties larger than 200K SF sustained robust leasing activity in the first half of the year, with national vacancy rates reaching an all-time low of 6.2%, according to Colliers International’s North American Big Box Industrial report. In addition, cap rates remained at a record low of 5%. Though demand for big-box product is strong, there is a growing shift in favor of smaller, leaner warehouses and distribution centers fueled by online and physical retailers’ need to be closer to consumers. This shift could moderately impact leasing activity for larger facilities toward the latter half of the year, but Colliers estimates the shift will not impact big-box industrial fundamentals too strongly. “The fundamentals of the business are still very strong. Absorption may not be at record levels, but it is near those levels,” Colliers President, Brokerage Services and Industrial for the U.S. Dwight Hotchkiss said. “From a historic standpoint, we still see strong absorption in all markets and strong demand in secondary markets and we see this momentum carrying over in to 2018.” Using Colliers research, Bisnow highlighted the 14 largest big-box industrial markets.