Dive Brief:
- E-commerce experienced 15% growth year-over-year in the first quarter, propelling an industrial demand boom as retailers overhaul their supply chains and wholesalers seek to keep up with tight fulfillment timelines.
- The big box space in particular is experiencing record tenant numbers, Colliers International Group said in a market report on industrial properties 300,000 square feet or larger.
- Of 1,908 existing buildings across six core markets, only 157 are vacant, Colliers reported. A record 98 big boxes totaling 60 million square feet have been added to the record over the past year, the firm reports.
Dive Insight:
Lower vacancies, higher rents and strong absorption mean demand will continue to outpace supply in core markets. Colliers identifies six key markets in this rising trend: Atlanta, Chicago, Dallas-Fort Worth, Greater Los Angeles, the Lehigh Valley-Eastern PA-NJ area, and Toronto.
New developments in these areas cite proximity to major retail markets as the primary reason for construction or expansion since distributors must now be able to transport goods to their destination within hours.
As a result, a second trend is rising: while prevalent, industrial demand is no longer isolated to these areas. Large developments in CO, TN and KY reveal a need for more, as well as larger distribution centers.
At mid-year, only 6% of the nation's industrial space was vacant and vacancy rates had declined in 84% of the markets that Colliers tracks.
