Land/Industrial Q4 2020 Market Report
Nine months after COVID-19 unexpectedly disrupted a previously strong economy, the industrial real estate market so far has not been negatively impacted. The vacancy rate—effectively unchanged from this time a year ago—continues to hover between 2-3%.
Several large transactions were completed in Q4, including 2121 Claremont Ave. NE, (38,872 SF), 3921 Academy Parkway N. NE (35,020 SF), and 5950 Office Blvd. NE (20,255 SF). Along with a host of smaller transactions, a healthy slate of activity to finish the year has resulted in today’s record low vacancy rate of 2.24%.
Unfortunately, downward pressure on the vacancy rate has not lead to notable increases in lease rates. Robust activity in the owner-occupied real estate market due to competitive lending terms is one among many potential explanations for stalled lease rate growth. Median lease rates on a triple net (NNN) basis are down slightly from the previous quarter with December figures at $7.50 per square foot, down $0.25 from the end of Q3.
Median lease rates on a modified gross basis have flatlined, consistently bubbling between $9.00 and $9.28 per square foot throughout 2020.
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.