After lackluster demand for U.S. industrial space, which includes Philly industrial space, in the first nine months of 2014, absorption of industrial space in Philadelphia and elsewhere in the U.S. is expected to increase in the last three months of the year as an estimated 50 million square feet of new warehouse and light industrial space comes to the market, a new report says.
The strong fourth quarter will come on the heels of nine months of flat demand for U.S. and Philadelphia industrial space, including warehouse space, which traditionally has increased quarterly but was flat in 2014, according to the CoStar Third Quarter Industrial Real Estate Review and Outlook.
With vacancies very low, there has been virtually no new industrial space in Philly or the nation for tenants to move into. The dozens of new buildings that will come to the U.S. and Philadelphia industrial space market by December 31 represent both build-to-suit properties and speculative buildings, the report said.
Logistics construction also is on the rise, with approximately 100 million square feet of logistics under construction nationwide, according to the report. Rising rents and demand justify the construction in most markets, giving developers confidence to build on spec. More than half of the logistics construction now underway is being built without signed tenants on board. One estimate put the current construction at about 30% below the market’s potential.
As rents rose at a higher rate than replacement costs, developers were encouraged to build more to meet rising demand for industrial space in Philadelphia and the U.S. The U.S. vacancy rate dropped to 6.9%, the report said, lower than it was at the same point in the last cycle, while rents came to within about 0.8% of their long-term trend.
At the end of the third quarter, rent was up 3.4% over the year prior in both the logistics and light manufacturing sectors of the U.S. industrial market, which includes industrial space in Philly. That very strong performance still had notable differences between higher quality and less functional space, CoStar said.
For more information about Philly industrial space or any Philadelphia commercial properties, please contact Lee Fein (215-799-6900-office; 215-206-5580-cell; lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate brokerage firm with expertise in Philadelphia commercial real estate listings and services.
Wolf Commercial Real Estate is a Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.
Wolf Commercial Real Estate, a Philadelphia commercial real estate broker that specializes in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new industrial space in Philly with the Philadelphia commercial properties that best meets their needs. As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals. If you are looking for industrial space in Philadelphia for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.
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