U.S. economic data were mostly positive in Q1 2017, and both
businesses and consumers remain optimistic about prospects for
the year ahead.
User demand slowed in Q1 with positive net absorption of 33.1 million
sq. ft. —down 42% from the previous quarter and 48% from Q1 2016.
The 44.9 million sq. ft. of new construction delivered nationwide in Q1
exceeded user demand, ending a 26-quarter streak of supply/demand
imbalance that dated back to 2010.
With new construction outpacing demand, the overall industrial
availability rate increased by 10 basis points (bps) to 8.0%, the first
increase in the past 26 quarters.
Very low vacancy in the Class A segment and intense competition
between supply-chain and distribution users for this space have
helped drive strong rent growth across most of the nation’s industrial