The U.S. industrial real estate market performed “well” during the first half of 2013, highlighted by year-over-year increases in transaction volume and revenue in many markets, as well as a widely sustained positive outlook for the remainder of the year, according to John Morris, Cushman & Wakefield’s leader of industrial services for the Americas, based on the commercial real estate services firm’s mid-year statistics.
U.S. industrial leasing volume rose during the second quarter of 2013, following three consecutive quarters of decline. Greater Los Angeles continued to lead the nation in leasing activity with 17.9 million square feet, followed by Chicago with 16.4 million square feet.
“Retail, wholesale, e-commerce and logistics requirements are driving demand in many of the nation’s major industrial hubs,” Morris said in a written statement. “Overall, Class A space continues to disappear in many markets as tenant demand remains steady. With quality options dwindling, both speculative and build-to-suit construction have gained some momentum in a number of markets.”
New industrial construction completions totaled 19.7 million square feet at mid-year, including 12.5 million square feet of speculative development. An additional 21.8 million square feet of speculative projects are scheduled to be completed by year-end.
“Even with increased construction, steady demand has kept vacancies low in most major markets,” Morris added. “The overall industrial vacancy rate fell to 8.0 percent during the second quarter, down 70 basis points from a year ago and 280 basis points lower from its recent peak during the first quarter of 2010.”