Liz Young of The Wall Street Journal tells her readers that fourth-quarter warehouse vacancy rates are at 5.2%, up from 3.1% in the same period a year earlier. She writes:
More warehouse space is sitting empty across the U.S. than at any time since the pandemic.
The average warehouse vacancy rate across the U.S. jumped to 5.2% in the fourth quarter of 2023 from 4.6% the previous quarter and 3.1% a year earlier, according to a new report from commercial real-estate services firm Cushman & Wakefield.
That marked the first time the vacancy rate surpassed 5% since 2020, when a pandemic-driven surge in e-commerce sales kicked off a frenzied expansion in warehousing construction and leasing.
Demand for storage space skyrocketed in 2020 as companies raced to get goods positioned for rapid delivery to homes. E-commerce giant Amazon.com doubled the size of its fulfillment network in 24 months as its business surged. […]
Demand has been particularly strong in major industrial hubs such as Houston, eastern Pennsylvania and Southern California, although the real-estate services firm did not release regional market data in its first assessment of the year’s final quarter.
Industry experts have warned the leasing slowdown raises the potential for a glut of warehouse space in the coming months with hundreds of million square feet of new development in the construction pipeline. Much of that space is being built without tenants lined up, known in the real-estate sector as speculative projects.
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