October 22, 2021 – Warehouse availability in the U.S. fell to record lows in the third quarter across the country, with industrial space all but disappearing near some of the country’s busiest distribution hubs on the West and East Coasts.
The average national industrial vacancy rate was 4.1% in the third quarter, according to Cushman & Wakefield Inc. The commercial real-estate firm says that this is the lowest it has ever recorded in data going back to 1995.
Real-estate firm CBRE Group Inc. says that the third-quarter demand for industrial real estate exceeded supply by 41 million square feet, pushing the vacancy rate down to 3.6%, compared to 4.3% in Q3 2020, and to the lowest level in data going back to 2002.
CBRE also found the vacancy rate for warehouses near the ports of Los Angeles and Long Beach, California, reached 1% in Q3. The region’s vacancy rate was 2.3% in the same quarter of 2020, the Wall Street Journal reports.
On the East Coast, the Boston; central New Jersey; and Charleston, South Carolina, markets showed a 1.9% vacancy rate during the quarter, the lowest rates outside of the Los Angeles region.
The woes affecting manufacturing supply chains are also hobbling developers’ ability to scale up capacity faster, says Jason Tolliver, head of logistics and industrial research at Cushman & Wakefield.
“Many clients who are looking to develop, they’re not able to get steel to construct their buildings right now through 2022,” Tolliver said.