Industrial supply outpaces demand for the first time in eight quarters
While demand still outpaces supply on a year-to-date (YTD) level, the third quarter saw industrial supply outpace demand for the first time in eight quarters, with overall net absorption down 18.1 percent in third quarter, compared with midyear, putting YTD absorption 10.4 percent behind last year's pace, according to Cushman & Wakefield. Vacancy ticked higher by 10 basis points to 3.2 percent as new leasing activity slowed and speculative construction completions swelled.
“As expected, the current economic climate coupled with historically tight market conditions across many markets, new leasing activity was more tempered in comparison to the previous seven quarters when it exceeded 200 million square feet,” said Jason Price, senior research director for Cushman & Wakefield.
Construction completions reached a recent historical high with more than 148 msf of industrial deliveries in the third quarter, 35.2 percent more than the second quarter total. Constru