Q2 2018 Market Report

Q2 2018 Market Reports

Industrial National Overview

Healthy Demand Spurs Construction

The warehouse sector maintained strong momentum, with national vacancy declining to 4.5% by mid-year—a 10 basis point improvement from the prior quarter and 40 basis points better than the year-ago period. Flex space, which serves R&D and similar functions, posted 6.6% vacancy, down 30 basis points annually.

The Inland Empire in Southern California dominated absorption metrics, capturing 14.2 million square feet in the first half. Long Island, New York experienced the largest net absorption loss at 3 million square feet. The Seattle-area market near Bremerton/Silverton emerged as the nation's tightest, with only 0.6% vacancy.

Office National Overview

Downtown Districts Get The Business

Central business district offices represent roughly one-quarter of total national inventory, yet captured disproportionate activity during the first half. "CBD's accounted for 38% of total absorption and 55% of space under construction," which reflected 10.4% growth compared to the prior year period.

San Francisco led major metros in absorption with 3.7 million square feet of net tenant activity. New York City followed with 2.7 million square feet, commanding "an average $60.26 annual asking rents, 74 cents per-SF more than San Francisco."

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