DEMAND ANALYSIS – TOP U.S. INDUSTRIAL MARKETS
- With less than half of the U.S. markets recording year-over-year increase in net demand in 2012, the overall U.S. market was flat in terms of net demand with 95.1 msf of net absorption in 2012, just up 0.7% from last year. Chicago led the nation with 14.9 million sf of occupancy gains, up 46.4% from last year.
- Overall absorption in the top ten industrial markets shows industrial absorption is close to pre-recession levels in some markets. The average annual absorption from 2005 to 2007 was 81 msf or 8.1 msf per market. During 2012, net absorption for these ten markets totaled 58.6 msf, or 5.9 msf per market.
- The strong market demand for high-quality Class A space has led to short supply, which in turn has resulted in constrained market activity and absorption in several major markets. For example in Dallas/Fort Worth, there are twelve existing buildings and three under construction that are available in excess of 500,000 sf. However, several of the existing buildings have some form of functional obsolescence. Tenants are looking for adequate trailer storage, “cross-dock” continuity, 30’ clear heights or greater and the ability to separate truck traffic from employee parking. In response to this demand, new development rose considerably in 2012 with 5.8 msf currently under construction, compared to 1.9 msf at year-end 2011.
Source: Cushman & Wakefield Research. Only markets tracked by Cushman & Wakefield offices are included in this analysis. Top ten markets based on inventory size.