Ecommerce and the push for last-mile distribution centers continue to provide a boost to the U.S. industrial market, with Avison Young reporting that 272 million square feet of industrial construction was completed throughout the United States in the first quarter of 2019.
St. Louis enjoyed its share of this industrial activity, too. Avison Young reported that 3.3 million square feet of industrial space came online in the first quarter in the St. Louis market. That’s impressive. It’s impressive, too, that 4.5 million square feet of new industrial space is in the pipeline in St. Louis.
Avison Young’s Spring 2019 Global Industrial Market Report showed that increased demand has led to a pipeline of 274 million square feet of industrial construction across 46 U.S. markets.
Again, the St. Louis market is a good example of just how strong the industrial sector is across the United States. Avison Young reported that the St. Louis industrial market had a vacancy rate of 4.4 percent as of the end of the first quarter.
There’s a demand here, too, for larger blocks of space. As Avison Young reported, Amazon has committed to four buildings in the St. Louis market, including a pair of 1-million-square-foot distribution centers and two mid-sized buildings. St. Louis-based WorldWide Technology has relocated to two 1.2-million-square-foot buildings in the Metro East submarket.
According to Avison Young, about 75 percent of the 4.5 million square feet of industrial space under construction in the St. Louis market has been pre-leased. That’s another sign of just how strong the industrial sector is right now.
“The St. Louis industrial market has experienced tremendous growth in recent years, particularly with bulk buildings in excess of 50,000 square feet,” said Timothy Convy, principal with Avison Young and managing director of the St. Louis office.
Convy said that tenants looking for options on the smaller end, between 20,000 and 50,000 square feet, are finding it difficult to find space.
Of course, St. Louis isn’t the only Midwest market that is seeing an industrial boom. Avison Young pointed to Indianapolis as another regional market that is seeing high demand for industrial space. This makes sense; Indianapolis’ central location makes it an ideal location for companies building distribution centers to help them ship product to their customers as quickly as possible.
According to Avison Young, the industrial development pipeline stood at 4.7 million square feet in the Indianapolis market as of the end of the first quarter. More than 1 million square feet of industrial construction was delivered during the quater.
The Detroit industrial market ranked second for net absorption during the past 12 months. Detroit ended the first quarter with 19.9 million square feet of industrial space absorbed.
Then there’s Columbus. Avison Young said that this Midwest market had an industrial vacancy rate of 4.2 percent at the end of 2019. The market also had 5.4 million square feet of construction in the pipeline during the quarter, following 7.3 million square feet of completions during the past 12 months.
