Cushman & Wakefield, a global leader in commercial real estate services, announced in a report released today that U.S. industrial vacancy reached a 15-year low as strong net absorption in the final quarter placed 2015 net occupancy gains among the strongest on record.
U.S. industrial markets absorbed 62.9 million square feet (msf) of space in the fourth quarter of 2015, up 9.1% from the previous quarter and up 0.5% from the fourth quarter of a year ago. For all of 2015, net absorption registered 238.6 msf, which places 2015 among the strongest years of net absorption gains on record. The national industrial vacancy rate fell 80 basis points (bps) from the fourth quarter of 2014 to 7.2%. Industrial vacancy is now a full 220 bps below the historical average.
U.S. industrial rents increased 4.2% in the fourth quarter compared to a year ago. Brisk leasing velocity and tight vacancy continue to put upward pressure on rents in the majority of markets with rental rate appreciation strongest in primary industrial hubs and secondary distribution markets. Industrial rents increased in 60 of 79 markets tracked by Cushman & Wakefield from the fourth quarter of 2014 to the fourth quarter of 2015. The development pipeline remains strong with 180.5 msf under construction and 172.4 msf delivered in 2015, but there is little sign that supply has overpowered demand.