Another Year Another Medal
U.S. industrial absorption is on track to finish 2018 with its third strongest net occupancy growth, behind only 2016 and 2014. Considering the strong economic fundamentals, there is no indication that demand will soften in the final quarter of 2018. This means that the three strongest years of industrial occupancy growth since the 1980s will have occurred in the last five years. Looking forward, the combination of limited new product and high utilization rates of existing footprints will translate to strong performance for Class A product and improved performance for Class B and C product.
Outlook
- Net absorption will surpass 250 msf in 2018 for a third year in a row, and eclipse 200 msf for a sixth consecutive year in 2019.
- Supply will modestly outpace demand with the overall industrial vacancy rate remaining in the low-to-mid 5% range through 2018 and 2019.
- Rent growth will remain strong in 2018 and gradually begin to decelerate in 2019.
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