Six of the country’s ten largest emerging industrial property markets are in the West, according to a new report released by the commercial real estate services giant Colliers International Group.
Those markets have been bolstered by a confluence of factors, including overall net absorption, decreasing vacancy rates, what’s in the construction pipeline, and rental rates.
The Colliers report, 10 Emerging U.S. Industrial Markets to Watch in 2022, notes that the country’s industrial real estate market “shattered records in 2021 and closed the year with record gains in occupancy, rental rates, and construction activity.”
Providing more evidence that the country has entered a post-pandemic economy, the report notes that “core markets across the country have thrived during this time, building and absorbing millions of square feet of industrial real estate.”
While the report nonetheless forecasts what it calls a coming cooling off period, it is quick to add that “significant opportunities remain for both investors and occupiers of industrial space.”
Spurring the boom has been the Covid 19-related surge in e-commerce, requiring new warehouse space, as well as a trend towards speculative development.
The Western half dozen largest markets identified in the Colliers report: Austin, with 2.7 million square feet of industrial space currently under construction; Las Vegas, at 6 million square feet of new built space; and the Reno-Sparks metro area, with 5.8 million square feet in construction.
Sacramento, California is seeing 3 million square feet built; Salt Lake City, breaking records with 13.2 million square feet; and the Stockton/Central Valley region with 5 million square feet.
The top ten growth markets appeared to share certain characteristics: they are enjoying a population boom, and have readily available port, highway, and rail intermodal facilities.
The four remaining locations on Colliers top ten list were all located in the South: Charleston, South Carolina; the Greenville-Spartanburg, South Carolina metro area; Norfolk, Virginia; and Savannah, Georgia.
By Garry Boulard
