McAllen, Texas – (Realty News Report) – Vacancy in the industrial real estate market has reached an all-time low as strength in the warehousing/distribution sector has tightened commercial real estate availability.
McAllen, just north of the Mexican border, was drawn into the national spotlight Thursday as President Donald Trump visited the city amid the ongoing immigration debate. The McAllen city limits extend to Rio Grande River in the southernmost part of Texas.
A new report released Monday by the CBRE real estate firm, said McAllen’s industrial/warehouse vacancy rate was 2.4 percent in the second quarter, a new record low. Five years ago, in 2013, the vacancy rate was nearly 13 percent, CBRE reported.
“Demand, like market activity, continues to be driven by the transportation/distribution logistics 3PL (third party logistics) sector which accounted for about 25 percent of total space requirements in Q4 2018,” CBRE said in its fourth quarter McAllen Industrial Report.
Some 402,000 SF of industrial space was under construction in the fourth quarter. Four build-to-suit properties were recently completed in nearby Pharr, CBRE said.
McAllen, located across the Rio Grande from Reynosa, Mexico, is about 70 miles west of the Gulf of Mexico. The city has an estimate population of 143,000. The bi-national Reynosa/McAllen metropolitan area has a population of 1.52 million. Significant commerce flows between the cities on McAllen/Reynosa international bridge on a daily basis.
McAllen’s hot industrial market is not expected to cool off anytime soon. CBRE reported active users were seeking to lease 1.6 million SF, which will nearly outstrip the supply of all available inventory. Cold storage buildings are in high demand.