Vacancy Drops in Key Logistics Hubs

Posted September 7th 2011
CCIM.com Newscenter

With absorption of more than 11.2 million square feet, California’s Inland Empire was the top performing U.S. logistics market in the first half of 2011, according to Grubb & Ellis Global Logistics Market Trends report. Inland Empire, along with Dallas (4.5 million sf), Atlanta (4.0 million sf), Chicago (2.6 million sf), northern New Jersey (2.6 million sf), and central Pennsylvania (2.0 million sf), constituted 85 percent of 1H11 absorption nationwide.

Minimal supply — a record-low 5.4 million sf were completed in 1H11 — and rising demand have driven the overall national vacancy rate down to 11.8 percent, a 200 basis point drop since year-end 2009. Philadelphia recorded the nation’s lowest vacancy rate at 2.2 percent, followed by Los Angeles (3.7 percent), Minneapolis-St. Paul (5.0 percent), Charleston, S.C. (5.4 percent), and Oakland, Calif. (6.8 percent). With fundamentals indicating the logistics market has officially hit bottom, completions are expected to rise in the second half of the year as the more than 7 million sf in the pipeline comes to market, according to the report.

Asking rents overall were up 0.7 percent nationwide over the past six months. The five highest rental rate markets across the U.S. include Los Angeles ($6.12 psf), Austin, Texas ($5.80 psf), Oakland, Calif. ($5.72 psf), Cleveland ($5.48 psf), and Minneapolis-St. Paul ($5.31 psf).

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