Q1 2020 Industrial Market Review
Norfolk’s vacancy tightened to a historical low of 2.9% to end Q1 2020. This is a decrease of 10 basis points (bps) quarter-over-quarter, as the quarter ended with 89,064 square feet of positive absorption. It is also a decrease of 114 bps year-over-year, as the 12-month net absorption was 945,480 square feet of positive absorption. The market has not been this tight since 2005, when vacancy hovered around 3.0%.
Average asking rents increased dramatically during Q1 2020, ending the quarter at$5.28, an increase of $0.47 quarter-over-quarter and $0.46 year-over-year. Overall, rates have generally been increasing and concessions decreasing. Some of the increase in rent can be attributed to the lack of available warehouse space in the market, which lost almost 450,000 SF of available space quarter-over-quarter, while flex product gained almost 25,000 SF of available space, bolstering the overall average asking rent.