Land/Industrial Q3 2020 Market Report
Two quarters into the COVID-19 crisis and industrial real estate has yet to be seriously impacted. Sale activity is robust due to ultra-competitive lending terms, while lease activity, though not quite as strong is healthy in its own right.
The vacancy rate remains low as a result of several large transactions, most notably the sale of 6600 Gulton Ct. NE, a 79,900 square foot manufacturing and lab facility that was acquired late in the summer. At the time of its sale, 6600 Gulton was the largest industrial property for lease on the market.
Other notable developments include the completion of two new construction projects at 7901 Las Lomitas Dr. NE and 7410 Washington St. NE both of which are available for lease at $11 NNN and $12 NNN, respectively. These rates exceed Q3 median NNN lease rates outlined below and would represent a significant shift in the market if agreed to by a tenant.
Median lease rates on a triple net (NNN) basis are up $0.25 from the previous quarter, with September figures at $7.75 per square foot. While increases to NNN rates have been slow and inconsistent, they are trending in the right direction as vacancy rates persist at historic lows. Median lease rates on a modified gross basis have experienced a more consistent upward trajectory as landlords have more leverage in lease negotiations due to the aforementioned status of space available to lease.
The Land and Industrial Q3 market research and data is compiled by NAI Maestas & Ward commercial real estate land and industrial specialist, Riley McKee. Riley advises industrial and logistics real estate owners and occupiers on leasing, acquisitions, and dispositions.