Constrained Supply Slows US Industrial Real Estate Absorption Despite Record Construction Volume
HOUSTON — Demand for industrial property continues to outstrip developers’ capacity to deliver new space, according to Transwestern’s latest national report on the sector. Occupiers soaked up a net 41.2 million square feet in the third quarter of 2019, a 23% decrease from 53.2 million square feet absorbed in the previous quarter and less than half the pace in third quarter 2018.
Meanwhile, the national vacancy rate ticked up for a third consecutive quarter to reach 5%. New industrial projects are leasing quickly and often before construction is complete with vacancy concentrated in older properties.