NEW CONSTRUCTION VS. OVERALL VACANCY
- From 2003-2008, 445.2 msf of new speculative construction delivered in the country, nearly triple the 154.69 msf of build-to-suit construction activity during that time. From 2009-2012 new spec construction declined to 65.7 msf.
- Spec construction increased steadily each year by an average of 28.0% from 2003-2008. With 112.4 msf of new spec inventory added in 2008, the overall vacancy rate ballooned to 10.4% in 2009, the highest national industrial vacancy since 1994.
- In 2009, spec construction suffered a 66.0% decline from 2008. Historically low construction levels helped the nation recover from the significant market slowdown in 2009. Since year-end 2009, the overall vacancy rate declined steadily to 8.3% at year-end 2012 due to the limited amount of spec construction added over the past three years.
- New spec construction hit an all time low in 2011 with only 2.8 msf of new inventory added to the market. Over the past year, confidence by developers in the market has been returning, evidenced by the 20.4 msf of new spec construction that delivered in 2012.
- From 2010-2012, build-to-suit construction was strong and totaled 44.8 msf. In 2012, 35.6 msf of new supply was added to the inventory and 43.0% of that was built on a build-to-suit basis for large tenants such as Amazon.com, Unilever, Kohl’s, Georgia Pacific and the Home Depot.
- With the smaller amount of new supply added from 2010-2012, absorption numbers were able to rebound ending each of those years in the positive and 2012 ended the year at 95.1 msf of positive absorption, the highest since 2006.
Source: Cushman & Wakefield Research. Only markets tracked by Cushman & Wakefield offices are included in this analysis.