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9/01/20
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This update provided by Transwestern
The latest research by Transwestern reveals that although the industrial sector hit a speed bump in the first half of 2020 due to COVID-19, strong demand for industrial space continues to drive robust development, investment and leasing activity nationally. The Elite 11 U.S. industrial markets report tracks growth markets that continue to lure global investors, as these are the most sought-after locations for big-box distribution users, last-mile logistics, e-commerce and manufacturing companies.
“Many sectors of the real estate market have been put on pause since March – but not the industrial real estate sector, which continues to flourish,” said Matt Dolly, Research Director. “Prior to the pandemic, the core markets led investment activity, and this movement has only intensified in recent months.”
Transwestern examines leading U.S. industrial markets as measured by inventory, net absorption, rent growth and construction activity. Notable takeaways from the first half of 2020 include:
• Texas regions continued to grow at the fastest rate, led by Houston, the only market to expand by more than 4.0% during the past 12 months.
• Dallas recorded the highest annual rent growth at 14.4%.
• The average asking rent in New Jersey exceeded $9.00 per square foot in 2020, increasing by nearly 70% since the previous recession.
• Atlanta, with 20 msf under construction and 10 msf already completed this year, is expected to set a record for industrial space delivered annually in 2020.
Even markets that posted negative rent growth in the first half of 2020, such as Northern California and South Florida, have favorable outlooks for the rest of the year due to strong fundamentals and intense investor interest.
“Core markets offer three primary benefits: Large population centers, established infrastructure and historical performance,” said Walter Byrd, Executive Managing Director. “Many investors have capital they are eagerly waiting to deploy in prime assets, which can be tough to come by in the Elite 11 markets.”
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