US Big Box Outlook: Big-box leasing remains strong

0 CommentsBy

Jan. 29, 2016

By: Eli Gilbert, Vice President of Research, JLL Houston

bigbox_leasingJLL’s “Big Box” Outlook examines warehouse facilities of at least 100,000 square feet located across the U.S. to evaluate leasing market fundamentals. This – when paired with demand requirements – gives an indication of where conditions are heading.

JLL’s latest outlook shows big-box leasing remains strong.

The report finds that several national economic indicators are healthy. For instance, when comparing 2007 to 2014: There were 18.2 million more people/consumers in the U.S.; total retail sales were up 17.3 percent; and ocean containerized cargo volume (measured in TEUs) was 8.1 percent higher. All of this benefits warehouse space needs.

Furthermore, YTD net absorption is up 29 percent from last year. Larger facilities were active in major markets, while mid-sized inventory fueled gains seen in secondary markets. Houston led secondary warehouse markets in absorption activity with 7 million square feet.

With strong positive net absorption, speculative construction is on the rise in major markets. However, it’s down 12.1 percent in secondary markets, many of which are extensions of major warehouse markets, meaning increased development in the ‘majors’ can create more competition for them. In a handful of markets vacancies are marginally up as speculative deliveries increase. Such increases, however, may prove short-lived based on current demand.

To view the full “U.S. Big Box Outlook” click here.

Leave a Reply

Your email address will not be published. Required fields are marked *