Development of industrial space in the U.S. is at a 10-year high -- and there are no signs of a slowdown any time soon.
Roughly 247 million square feet of new industrial space is expected to be delivered this year, the most since 2007, according to real estate services firm JLL. Rents are at record highs, while vacancies are at a 17-year low.
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Construction activity is heating up nationwide and five metropolitan areas -- Dallas, the Inland Empire east of Los Angeles, Philadelphia, Denver and Atlanta -- accounted for more than half of new development starts in the first quarter. And although more supply is hitting the market, JLL expects 88% of the markets it tracks to remain favorable to landlords.
JLL also noted that some tenants are starting to become cautious and could be surprised with more expensive rents when leases come up for renewal. E-commerce companies and food subscription services drove leasing activity in the first quarter, the firm said.
"The market is on fire today for industrial property owners, but in some markets it poses unique challenges for companies searching for industrial space," said Craig Meyer, president of JLL's Industrial group in the Americas.
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(END) Dow Jones Newswires
June 06, 2017 15:42 ET (19:42 GMT)