The U.S. logistics market experienced a strong first half in 2011 when 32.7 million square feet of warehousing and distribution space was absorbed, according to the "Logistics Market Trends United States" report from commercial real estate firm Grubb & Ellis. Positive demand was more heavily weighted toward the second quarter, with quarterly net absorption of 18.1 million square feet. Demand was positive in 21 markets, while 10 markets saw an increase in their total vacant square feet.
The top six national logistics markets-Inland Empire (11.2 million), Dallas (4.5 million), Atlanta (4.0 million), Chicago (2.6 million), Northern New Jersey (2.6 million) and Central Pennsylvania (2.2 million)-accounted for 85 percent of the total net absorption. Detroit, which is a relatively small logistics market in relation to its total industrial base, was the seventh best performing market at 1.4 million square feet absorbed. Orange County was the one Southern California market that broke the trend and recorded 372,000 square feet of negative demand.
New supply remains extremely constrained with 5.4 million square feet of completions during the first six months of the year. Only 10 logistics buildings were completed across seven markets.
After hitting bottom, new completions will start to rise during the second half of 2011. Currently, there is more than 7 million square feet of logistics space under construction nationwide.
The complete report is available free from Grubb & Ellis.
