Oversupply concerns are overblown
February 17, 2020 | Matt Baker | RE Journals
Nearly 290 million square feet of industrial space came to market across the nation last year. A new report shows that these deliveries absorbed at strong rates, assuaging fears that the red-hot sector was in danger of overbuilding.
According to a new report from CBRE, only 39 percent of the industrial and logistics real estate that developers completed in the U.S. in 2019 remained available. While deliveries outpaced the 255 million square feet of new absorption, robust leasing from e-commerce, retail and other occupiers requiring Class A space kept supply and demand dynamics healthy.
“With national vacancy at 4.4 percent it was becoming difficult for occupiers to find modern space,” said James Breeze, CBRE global head of industrial and logistics research. “This new supply is needed and will keep transaction activity strong, especially for larger deals. The robust activity in newly constructed product also warrants the large amount of ground breakings we continue to see.”
