2019 Sprints To The Finish, 2020 Starts Strong
- Increased industrial demand has led to a rise in net absorption which registered a very strong 8,187,200 square feet for the quarter and stands at 24,124,500 square feet for the year.
- Sales and leasing activity for the quarter was 13,294,800 square feet which excludes renewals. Renewals are excluded from gross and net absorption calculations.
- Construction completions totaled 13,314,700 square feet this quarter, nearly halving the existing pipeline of supply, which now stands at only 16,997,000 square feet.
- Despite above average industrial deliveries this quarter, vacancy remained at a very manageable 3.5%
Inland Empire Industrial Market:
The Inland Empire market remains the most sought-after warehouse and distribution market in the United States with the lowest vacancy rate and highest rental rate of comparable major distribution hubs.
- Development activity over the next 18 months will bring roughly 17 million square feet to the market, expanding the base by roughly 3.1%. This will be less than half of what was delivered in the previous 18 months, meaning the Inland Empire will continue to be a supply constrained market.
- Vacancy rates will continue to remain low, especially for buildings over 1 million square feet.
- Despite warning signs of economic weakness, 2019 was a stellar year for industrial real estate. Going into 2020, much of that weakness and uncertainty has been removed and there is cause for optimism. Housing starts have increased, manufacturing orders have expanded, the yield curve has uninverted and some clarity has emerged in the ongoing trade war. Industrial real estate fundamentals remain generally positive for the foreseeable future.