The demand for warehouses and DCs continues to outpace supply in the U.S. industrial real estate market, thanks to the steady growth of e-commerce, according to a report released today by CBRE Group Inc., the Los Angeles-based real estate and logistics services giant.
The availability rate for U.S. industrial real estate declined by 10 basis points in the second quarter, marking the measure's 32nd consecutive quarterly decline, CBRE said. In raw numbers, the availability of U.S. industrial real estate dipped to 7.2 percent in the second quarter, its lowest point since 2000.
Despite that persistent demand for warehouse space, the trend could be tempered by the impact of the Trump Administration's new tariffs on goods from China, CBRE said. "The industrial sector in the U.S. remains remarkably balanced," Tim Savage, CBRE's senior managing economist and principal data scientist, said in a statement. "As e-commerce changes the landscape, demand for industrial property remains strong. However, we remain focused on the developments in trade policy, which could impact the industry."
While the national availability rate posted a slight decline, that total included a variety of reports from different U.S. geographical areas, with some dropping steeply and others recording gains, the report found.
In the second quarter, 39 U.S. markets posted declines in industrial availability from the first quarter, 21 reported increases, and four remained unchanged, CBRE said. Markets with the largest declines in industrial availability in the second quarter included New Haven, Conn. (down 430 bps), Tucson, Ariz. (down 310 bps), Sacramento, Calif. (down 260 bps), and Jacksonville, Fla. (down 220 bps). Meanwhile, markets that reported gains in availability included Pittsburgh (up 150 bps), Louisville, Ky. (up 140 bps), and Allentown, Pa. (up 130 bps).