Interested in Commercial? – Look at Warehouses

Industrial real estate is drawing increased interest from investors. Sales of industrial and warehouse type properties have jumped almost threefold since last year. The vacancy rate has also fallen in these types of properties for 3 consecutive quarters.

When businesses start to see elevated demand from customers, one of their first reactions is to improve production and increase inventory. Those steps come first before hiring new workers or developing their offices. Demand for office, storage and manufacturing space is increasing, but space inventory is low. Some builders are beginning to concentrate in this area, starting construction on new warehouse and industrial space in the Northeast primarily.

In the first half of this year, the vacancy rate declined to 9.7%. This is the third quarterly decline and the lowest level since 2009. During this same period, 70 million square feet traded hands, an improvement of almost 160%. Year-to-date, leasing activity has risen more than 27% to 205 million square feet compared to the same period last year.

Looking at the last six months, there is strong leasing demand, declining vacancies, and positive net absorption. If you’re a commercial investor or considering it, look around at your local market. Assess employment, industry and commercial activity. Check out available space and what it’s leasing for. You just may find opportunity before it hits your competitors’ radar.