The so-called availability rate for U.S. industrial real estate was essentially unchanged in the first quarter as demand for warehouses roughly matched the delivery of newly constructed supply, according to a report published Thursday by commercial real estate giant CBRE.
The Los Angeles-based firm said the availability rate dropped by less than half a basis point during the quarter, marking the 35th straight quarter of declining availability and its lowest point since 2000. CBRE defines availability as the sum of vacant space plus space that is occupied but otherwise being marketed for use by new tenants. In the first quarter, CBRE said 30 markets registered declines in industrial availability from the previous quarter, 26 reported increases, and eight remained unchanged.
CBRE's Global Chief Economist Richard Barkham said the industrial and logistics real estate market continues to benefit from the shift to e-commerce and a healthy consumer market. He also said he expects absorption to increase for the remainder of the year. CBRE's preliminary data show that net absorption of industrial real estate across 55 U.S. markets was 32 million sq. ft. in the first quarter, matching construction completions of roughly 33 million sq. ft.
"Net absorption should pick up through the rest of this year in step with the economy," Barkham said in a statement announcing the quarterly results. "We expected a tepid start to the year, due in part to a weaker global economy and stock market turbulence at the end of last year. But the overall picture is a nicely balanced industrial sector, with demand and supply broadly in line."