US Industrial Vacancy Rate Falls for 20th Consecutive Quarter


industrialThe U.S. industrial market shook off weakness in the manufacturing sector and continued its historic run in the first quarter, according to Newmark Grubb Knight Frank.

The vacancy rate fell for the 20th consecutive quarter to its lowest level in 14 years, ending the first quarter at 7.0%. Vacancy was down from 7.2% at the end of 2014 and down from 7.7% a year ago.

Asking rents continued to rise, ending the first quarter at $5.81/SF NNN, up 4.1% over the last four quarters and up 16.1% from the cyclical trough of $5.00 in 2010.

Demand is off and running this year, with first-quarter absorption of 43.5 million SF trumping last year’s first-quarter total of 41.7 million SF. Absorption also trumped space completions, which totaled 42.6 million SF in the first quarter.

Tightening market fundamentals are boosting construction activity, with space in the pipeline ending the first quarter at 125.9 million SF—the sixth consecutive quarter where construction exceeded the 100 million mark.


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