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

markets.