• With an impressive 127.9 million sq. ft. of total net absorption, the first half of 2016 marked one of the industrial market’s strongest midyear performance levels since 2000. Net absorption of 66.4 million sq. ft. in Q2 2016 marked a 25th consecutive quarter of positive user demand—the longest such streak in more than 20 years.
• Developers have responded to rising rents and extremely limited supply, particularly in the Class A segment. The second quarter saw 41.6 million sq. ft. of new development completed, with an additional 185.3 million sq. ft. under construction. Despite the growth in deliveries, new supply has been unable to keep up with supply chain-driven user demand.
• Tight supply pushed rents up in many core markets, with growth of 1.7% for the quarter and 6.6% year-over-year. An additional 2.9% is forecast for 2016, which would mark a fifth consecutive year of rent growth.
U.S. industrial acquisitions, including portfolios, totaled $12.5 billion in Q2 2016—5.7% below Q1 2016 and down by 26% year-over-year. Purchases of individual assets—the best benchmark for investment momentum—rose 12.2% year-over-year.