Philly Industrial Vacancy Rate Drops to All-Time Low
Flush with cash from stimulus checks and record savings accrued while social distancing, U.S. households continue to spend at record levels on consumer goods heading into the second half of 2021.
This spending splurge is also driving voracious demand for logistics space, pushing Philadelphia’s industrial vacancy rate below 5% for the first time on record during the second quarter.
Philadelphia is also leading the U.S. in logistics property rent growth, with year-over-year rent gains now surpassing 10%. This is largely because of the market’s shortage of modern industrial space and Philly’s emergence as a key point for distributors delivering goods along the densely populated Interstate 95 corridor.
The volume of industrial space under construction has more than tripled in the Philadelphia area since the start of the pandemic, raising risks that supply eventually could overwhelm demand. But all signs suggest that leasing will be up to the task of filling the more than 20 million square feet of projects set to deliver by the end of 2022.
U.S. consumers haven’t even begun to draw down the record savings they’ve accrued over the past 18 months, meaning high levels of retail spending should keep distributors devouring industrial space well into next year.
*Article courtesy of Costar
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