Industrial National Overview
Healthy Demand Spurs Construction
The nationwide vacancy rate for warehouse space, which accounts for about 90% of all industrial buildings, settled at 4.5% in Q2, down 10 basis points from Q1 and 40 basis points from a year ago. The vacancy rate for flex buildings, also designed for R&D and other uses, was 6.6% at the end of Q2 and down 30 basis points from a year ago.
Southern California’s Inland Empire led the nation in first-half net absorption with 14.2 million SF. The biggest absorption loss was 3 million SF in Long Island, New York. The tightest market was in Bremerton/Silverton near Seattle, with a 0.6% vacancy rate.
Office National Overview
Downtown Districts Get The Business
Office space in central business districts accounts for about one quarter of the total inventory with the remaining space tracked in suburban markets. But in the first half, CBD’s accounted for 38% of total absorption and 55% of space under construction, which was up 10.4% compared to the same period last year.
New York City is the nation’s costliest metro, but at the end of Q2 San Francisco was the nation’s hottest, posting 3.7 million SF of net absorption. New York City was second in absorption with 2.7 million SF at an average $60.26 annual asking rents, 74 cents per-SF more than San Francisco.
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