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Research - AUGUST 1, 2019

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Prologis: Industrial vacancy to stay near historic lows

by Andrea Zander

Despite the boon by U.S. logics real estate developers, who have used that time to bring new supply online in markets with lower barriers to entry in the last 10-plus years, the supply is behind demand in aggregate, with vacancies holding at 4.5 percent, according to Prologis’ proprietary Industrial Business IndicatorTM.

Prologis Research forecasts 250 million square feet of net absorption and 260 million square feet of new supply in 2019 — which in turn should keep vacancies at or near their historic lows (see Exhibit 2).

Any disconnects between demand and supply should continue to be concentrated in submarkets with high big-box activity, making market conditions challenging for customers looking to expand in all other areas.

Prologis’ proprietary Industri

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