JULY 28, 2016

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NPI occupancy hits 15-year high

by Reg Clodfelter

Occupancy in the NCREIF Property Index set a new 15-year high as it reached 93.2 percent during second quarter 2016.

While NPI occupancy is up for all property types in 2016, none edged industrial’s 95.5 percent occupancy for the top mark, despite it remaining flat during second quarter. The NPI trend is following those in the greater U.S. market as well, with industrial vacancy dropping to 9.0 percent in June 2016, 70 basis points below the previous trough in 2007 (though nearly 250 basis points higher than the June 2001 trough), according to CBRE. Industrial rents have nearly reached their previous peak as well, climbing to $6.36 per square foot in June, just below the previous cyclical peak of $6.40 per square foot, according to CBRE.

In the NPI, the industrial sector also had the highest returns among property types — both by quarter and for the year ended June 2016 — with only industrial and retail returning more than 2 percent for the q

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