HOUSTON – (Realty News Report) – Southeast Houston, with 4.7 million SF under construction, ranks No. 5 in a CBRE national construction ranking of industrial submarkets in 2019.
North Fort Worth, with 12 million SF, led the nation as the top construction submarket, CBRE said. It was followed by South Atlanta, Northeast Atlanta and Ontario, Calif.
The report said 289 million SF of industrial and logistics space was delivered in the nation in 2019. CBRE said 60 percent of the new space was absorbed last year, easing concerns of oversupply.
“With national vacancy at 4.4 percent is was becoming difficult for occupiers to find modern space,” said James Breeze, CBRE Global Head of Industrial & Logistics Research. “This new supply is needed and will keep transaction activity strong, especially for larger deals. The robust activity in newly constructed product also warrants the large amount of ground breakings we continue to see.”
Another major factor contributing to the strong absorption of new construction is the increase in built-to-suit development—the construction of space for a specific space user. This segment made up 28.1 percent of new construction activity, as companies increasingly need unique requirements to meet their specific demands.
Supply fundamentals should remain stable this year, as already 33 percent of the 309 million SF under construction nationwide is already accounted for. A preleasing rate of 25 percent for under-construction product typically are indicative of a solid leasing environment.
“With pre-leasing robust for under construction projects, the overall vacancy rate is expected to remain in check in the foreseeable future,” said Breeze.
March 5, 2020 Realty News Report Copyright 2020
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