Industrial real estate brokerage has seen a spike in warehouse properties for the past 16 quarters. Rents are up and continue to rise. Vacancies have dropped to a national low of 7.8%. These prime conditions are a result of the growing online retail market, which reduces the need for brick-and-mortar storefronts and increases demand for industrial warehouse space.
Illinois broker Melissa Gray commented on the growth. “Many companies seeking industrial warehouse space to distribute products want spaces that are close to major urban areas. Warehouses are one of the strongest and top-performing spaces I see at this time.”
Demand isn’t expected to plateau. Tenants are leasing more space today to lock in rent rates as they continue to rise. This trend is accelerated because developers aren’t building enough new space to meet the market needs.
Prologis CEO Hamid R. Moghadam says the limited pool of new construction delivered in the face of growing demand is unprecedented in his 31 years in the business, “There have never been periods where we have under-built the demand in the U.S., anywhere near these levels that we experienced last year, and this coming year, and next year.”
Reports show that high demand and limited supply drove up asking rents to $4.84 per square foot last quarter, up slightly from the previous quarter and 2.8% higher than first-quarter 2013. In top 54 markets, rents rose by an even stronger 3.8% year over year.
If your business is expecting growth and an increased need for warehouse space, talk to our industrial real estate brokers about opportunities in the Midwest. Intelica CRE™’s Industrial Services Group (IISG) can help with:
Forecasting a cost efficient growth plan today, could save your business financial resources down the road.