2. Analysis: Of the top 23 U.S. markets, Houston had the lowest vacancy rate, 4.2
percent, in the first quarter. The average vacancy rate nationwide was 8.4 percent.
Hampton Roads came closest to the national average with a vacancy rate of 8.3
percent. Sacramento had the highest rate at 13.7 percent. Vacancy rate refers to
the percentage of the total square footage of buildings in the market that aren’t
occupied, although they may already be leased.
3. What Jones Lang LaSalle Says: Leasing activity remained strong in Houston in
the first quarter, continuing to hinge on the energy services industry as oil prices
held between $80 and $90 a barrel. Vacancy rates will continue to decline until new
development adds more space and finally catches up with demand.
4. Analysis: The Inland Empire experienced the largest drop in vacancy rates, 8.6
percent, from the fourth quarter of 2012 to the first quarter of 2013. Denver's
vacancy rate grew almost 4 percent quarter-to-quarter.
5. What Jones Lang LaSalle Says: The opening quarter of 2013 saw notable
speculative warehouse construction in the Inland Empire that continues to meet
exceptional demand. Home Depot announced plans to develop a 1.1 million-
square-foot fulfillment center to support its e-commerce operations in the region,
while automotive giant BMW of North America will occupy a custom-tailored
326,500-square-foot facility in Redlands, Calif.
6. Analysis: Memphis had the lowest average asking rental rate in the first quarter at
$2.47 per square foot. The average rental rate in all U.S. markets was $4.39, the
same rate as that of Hampton Roads. Of these markets, Washington, D.C., had the
highest average rent of $7.30.
7. What Jones Lang LaSalle Says: Average asking rents vary and are largely based
on a market's identity: is it a major logistics corridor or a suburban locale? What is
the supply and demand model? Is it a mature market or an emerging industrial
corridor?
8. Analysis: Richmond, Va., saw the largest drop — 4.2 percent — in average rental
rates year-over-year. Seattle's rental rate jumped 12.5 percent during the year.
9. What Jones Lang LaSalle Says: Small to midsize firms are fueling growth in
Seattle, with demand for space in the 5,000- to 50,000-square-foot range. Demand
also is coming from larger users seeking 50,000 square feet or more, as
companies expand their local footprint.
10. Analysis: Los Angeles, with 16, had the largest number of industrial real estate
buildings being built in the first quarter, followed by the Inland Empire with 15.
Jacksonville and Hampton Roads had no buildings under construction this quarter.
Jacksonville has not had any buildings being built since the third quarter 2011.
11. What Jones Lang LaSalle Says: Sixteen projects totaling 3.2 million square feet
are under construction throughout the Los Angeles industrial market. These
projects range in size from 38,974 to 617,500 square feet. The majority of the
activity is based in the Central and South Bay, with developers such as Sares
Regis, KTR Capital Partners and First Industrial active in the region.
12. Analysis: The Inland Empire had the most square footage of buildings under
construction, at 7.27 million. The average square footage under construction in the
top 23 markets during the quarter was 2.12 million. Jacksonville and Baltimore
have no projects under way.
13. What Jones Lang LaSalle Says: Ten million square feet of new warehouse
product has been developed in the Inland Empire since 2012, more than half of
which has been leased or sold. There are 16 requirements for space in excess of
500,000 square feet, so speculative construction won’t slow any time soon.
14. Analysis: The U.S. Midwest had the highest market share of square footage
among U.S. regions in the first quarter of 2013, at 43.4 percent. The Southwest
had the second highest market share of 17.8 percent. The Northwest had the
smallest market share this quarter with 3.4 percent.
15. What Jones Lang LaSalle Says: Chicago is the nation’s largest industrial market,
with 1.1 billion square feet of warehouse and DC space.
16. Analysis: Chicago had the highest total square footage of industrial buildings in
the first quarter with 1.13 billion. The average of the top 23 markets was 325 million
square feet. Hampton Roads had the lowest amount of square feet with 64 million,
its second consecutive quarter with that amount.
17. What Jones Lang LaSalle Says: In one of the quarter's most notable trends, the
Inland Empire led the U.S. in net space absorption activity with 4.2 million square
feet. But the Inland Empire’s total stock size is only 37 percent the size of Chicago.
18. Analysis: Net absorption is the total square footage of space occupied by a tenant
that has moved in and occupies an industrial space, over space that a tenant has
evacuated and cleared everything out. This differs from vacancy rate in that in the
case of net absorption, a building could be leased and not occupied. During the
first quarter of 2013, the Inland Empire experienced the highest square footage of
net absorption at 4.2 million square feet. The average in the top 23 markets was
approximately 1 million, close to that of Houston. Northern New Jersey had the
lowest net absorption, with a negative 700,000 square feet.
19. What Jones Lang LaSalle Says: The Inland Empire is leading the charge, and the
sky’s the limit as companies are eager for new, inland mega-box space. The
market has a great strategic location and borders Los Angeles County, which
houses the nation’s busiest seaports, Los Angeles and Long Beach.
20. STAY INFORMED.
Trade Data & Intelligence from the Industry Experts
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