U.S. industrial vacancy rate forecast to reach 5.9% in 2016

U.S. industrial properties posted the lowest vacancy rate in 16 years at the end of the second quarter, according to Marcus & Millichap, which forecasts the U.S. industrial vacancy rate will decline 40 basis points this year to 5.9 percent on net absorption of more than 200 million square feet. Nearly 1.1 billion square feet of industrial space has been occupied since the vacancy rate peaked more than six years ago, according to Marcus & Millichap.

Gains in retail sales, resurgent residential construction and the steady performance of U.S. manufacturers producing for the domestic market are driving the shipment and warehousing of goods, supporting a strong outlook for the industrial sector. The sale of retail items, though, remains the principal force propelling the sector’s extended upswing, which is now in its seventh year.

Millennials are also emerging as a potent economic force and as a contributing factor behind the creation of new ways to d