The Industrial & Logistics sector of the U.S. retail market slumped in the first quarter, as construction of new buildings dropped significantly and demand dropped even faster, forcing a slight rise in vacancy rates, according to report from real estate services firm CBRE.
Specifically, the overall vacancy rate rose by 20 basis points to 6.3%, the highest since Q2 2014. On the other side of the scales, construction completions fell to their lowest quarterly level since Q2 2018 at 64.6 million square feet, and plummeting construction starts will lead to fewer completions in coming quarters, CBRE found.
According to CBRE’s analysis, the reason is that many occupiers are taking a wait-and-see approach before making real estate decisions. The imposition of widespread tariffs on imports likely will have a significant impact on market activity, especially if increased costs are passed on to consumers, the report said.
