Larger properties over 1 million square feet were the bulk of the nation’s Top-100 industrial leases through the first half of 2022. The desirability of the asset type is apparent in pockets of SoCal that are experiencing sub 2.1%, even sub 1% vacancy rates. But also, the rest of the nation is pushing to gain a foothold in the tight sector.
According to a CBRE report—on the first half 2022—we have already seen 37 signings among properties over 1 million square feet which is a 54% increase year-over-year. The average size of properties for the whole Top-100 was 931,860 square feet; 15 of them were renewals indicating tenant expansion is alive and well.
The graphic above will show that Atlanta led the nation with 12 industrial leases in the Top-100; while five of those were million-square-foot deals. Closely tailing Atlanta was Chicago which had 11, and Savannah rounding out as the top emerging market with 7.
Areas with the highest rate of development will attract further industrial leases. Investors have found success in redeveloping hotel properties into industrial properties in order to enter certain market.
And we’re already noticing that this is true with manufacturing starts being 83% higher year-to-date, on top of a 5% increase in total construction.