Americas Industrial & Logistics Trends Report | May 2017
Growth in net absorption of Americas industrial & logistics space continued for the 28th consecutive quarter in Q1, but slowed substantially after near-record user demand last year.
Although net absorption in the U.S. decreased both quarter-over-quarter and year-over-year, the vacancy rate fell by 10 basis points (bps) to 4.8% and the availability rate was up slightly at 8.0%.
For the first time since Q3 2010, leasing demand fell short of new construction, though the gap between the two was narrow and had a negligible effect on overall availability.
As a result of the tight supply, the net rent index increased by 1.6% in Q1 and 6.7% year-over-year to $6.24 per sq. ft. —the highest level since CBRE Econometric Advisors (CBRE EA) began tracking this metric in 1980.
Driven by growth in the national economy, the Canadian industrial market has strengthened with sharp gains in user demand and record-low vacancy rates in Toronto and Vancouver.
Economic uncertainty in Mexico caused a slowdown in the industrial market, with user activity tapering slightly in the quarter and rents declining.
Despite some global and domestic economic uncertainty, the industrial real estate market continues to expand in most parts of the Americas.