SANTA BARBARA, Calif., Nov. 30, 2018 – Bolstered by healthy economic fundamentals, the U.S. industrial real estate market grew impressively in the first half of 2018, according to a new report from Yardi® Matrix.
Indicators of the sector’s strength include a 1.1% year-over-year increase in jobs in the trade, transportation and utilities sectors, and nearly 125 million square feet of industrial product that came online. Investment activity totaled $39 billion in the first half, a 26% year-over-year increase, while the 4.9% first-quarter vacancy rate was less than half the record high in 2010. The investment total represented the largest growth rate among all commercial real estate sectors.
E-commerce sales, totaling $120.4 billion in the second quarter alone, was a principal factor of the strong performance and drove a need for more distribution centers close to dense population areas. The volume exceeded 2017’s second-quarter total by 15.4% while total retail sales grew by only 5.7% in the period.
The new industrial product, more than 90% of which is warehouse and distribution space, roughly matched demand. Industrial rents increased by 7% year-over-year nationwide at mid-year.
Read the full report, which also includes in-depth examinations of the industrial markets in Chicago, California’s Inland Empire and New Jersey.
Yardi Matrix offers the industry’s most comprehensive market intelligence tool for investment professionals, equity investors, lenders and property managers who underwrite and manage investments in commercial real estate. Yardi Matrix covers multifamily, industrial, office and self storage property types. Email [email protected], call 480-663-1149 or visit yardimatrix.com to learn more.
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