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.
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