CBRE: logistics real estate supply ticked up slightly in second quarter
Expansion breaks nearly nine-year trend of declining warehouse space in historically tight market.
The supply of industrial and logistics real estate ticked up slightly in the second quarter, signaling potential relief from nearly nine years of declining availability for companies seeking warehousing and manufacturing space, a report said Monday.
The availability rate for industrial space across 51 major U.S. markets increased in the second quarter by six basis points to 7.1 percent in the second quarter from the first, according to the report from commercial real estate giant CBRE.
CBRE also said it had revised its first-quarter result to a 2-basis point increase, instead of a half-basis point decline. That update caps the market's historic run of declining availability at 34 consecutive quarters, or eight-and-a-half years.
Despite the slim increase, those past statistics pushed the availability rate to drop 12 basis points on a year-over-year basis. The firm defines availability as the sum of vacant space plus space that is currently occupied but otherwise being marketed for use by new tenants.
"We long have forecast that availability would bottom out and then slowly increase as a natural progression for the red-hot industrial market in the U.S.," Richard Barkham, CBRE head of Americas research and global chief economist, said in a release. "In the future this might provide respite for e-commerce companies and other users that have faced many years with scant availability of space. At the moment, though, the market remains quite tight."
Over the past year, demand and supply have been relatively balanced, with developers delivering 206 million square feet of new buildings and users newly occupying 208 million square feet. "We do expect the factors driving demand to ease slightly in the coming quarters, as economic growth slows," Barkham said. "This won't be anything dramatic, as the overall economy is in good shape. But market conditions will ease slightly, particularly for larger units."
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