Transwestern released its national industrial report for the second quarter of 2018, revealing that a majority of industrial markets posted positive net absorption in the quarter.
The report indicated 37 of 47 markets had positive absorption for the second quarter of this year, while 43 of 47 had positive absorption over the past 12 months.
In primary and secondary markets, absorption happened quickly, which Transwestern said kept the national industrial vacancy rate low. Thirty markets recorded vacancy at or below the United States average of 5 percent.
“After a slow start to the year, we saw a sharp uptick in consumer spending in the second quarter, which boosted e-commerce activity and contributed to job growth in the trade, logistics and transportation sectors,” said Matthew Dolly, research director in New Jersey. “In markets where absorption cooled somewhat, the issue is not lack of demand but a wait for new construction to deliver.”
As for New Jersey, which is a secondary coastal port market:
- Top 3 market nationally for second quarter net absorption;
- Top 10 for supply currently under construction;
- Vacancy and asking rents are at historically high-levels;
- One of five markets with a 12-month net absorption total more than 10 million square feet;
- Vacancy improved to record low for fourth consecutive quarter with a vacancy rate of 3.9 percent, which is lower than the U.S. average of 5 percent;
- Average asking industrial rent of $7.80 per-square-foot was 29 percent higher than the U.S. average of $6.05 per square foot in the second quarter of 2018;
- No. 12 of 47 in U.S. annual rent growth.
Other coastal port markets, such as Columbus and Cincinnati, Ohio; Charlotte, North Carolina; and Phoenix, also made the Top 10 for absorption in the second quarter.
In the second quarter, 39 markets saw year-over-year rent growth, the report said.
“U.S. ports continue to experience record-setting volumes, and this has been amplified by retailers pre-ordering merchandise amidst rising trade tensions and tariffs that many fear will lead to higher-priced consumer goods,” said Michael Soto, research manager in Los Angeles. “While rising protectionism has added a level of uncertainty in the supply chain not seen in quite some time, the U.S. consumer has been resilient, and the market is expected to remain strong through year end.”
To see the full report, click here.