Just Released: Colliers International 3Q13 North American Industrial Highlights
- The “I’s” have it! Key industrial property type indicators (vacancy, net absorption), intermodal traffic, the expansion on inland ports, and ISM’s Manufacturing at a Glance all point to another strong year in 2014.
- 2013 was a record year for intermodal traffic, surpassing the previous 2006 record of 12.3 million containers. AAR’s YTD U.S. intermodal rail volume was up 4.6% over 2012, to 12,831,692 containers. December’s average volume of 239,695 units per week was the highest for any December on record.
- The “perfect game” goes into the 10th inning! After ten straight quarters of improvement, the fundamentals look right for a great Spring Training in 2014. Overall vacancy for North American industrial markets as fallen below 8 percent, and Q3 net absorption was the best thus far in 2013 (51.2 MSF for U.S. markets, vs. 47.4 MSF in Q1 and 42.0 MSF in Q2).
- No signs of overbuilding risk. Although 21.1 MSF of new supply was added throughout North America in Q3 (16.7 MSF of that in the U.S.), only 11.1 MSF was speculative. Build-to-suit construction is behind the increasing warehouse supply, especially in the U.S., where 56 percent (9.3 MSF) of new supply is build-to-suit. Given that net absorption has averaged 50 MSF per quarter thus far in 2013 (twice new supply), overbuilding risk is not on the horizon.
- Dominant port, inland distribution and air cargo markets continue to lead warehouse leasing. Among port markets, Los Angeles leads absorption in the U.S. (4.6 MSF), and Toronto leads Canadian markets (4.3 MSF). Leading inland distribution markets in Q3 were Dallas (4.2 MSF), LA – Inland Empire (3.6 MSF), Philadelphia (2.6 MSF), New Jersey – Central (2.3 MSF) and Denver (1.5 MSF). Air cargo markets Memphis (3.6 MSF) and Columbus, OH (1.7 MSF) were among the top ten.