Shortages? Why is Available Warehouse Space Shrinking?

WSJ: Tighter Warehouse Space Adds to the Supply-Chain Squeeze

The third-quarter demand for industrial real estate exceeded supply by 41 million square feet, pushing the vacancy rate to 3.6%, down from 4.3% in the same quarter of 2020 and the lowest level in data going back to 2002, according to new figures released by real-estate firm CBRE Group Inc.

CBRE found the vacancy rate for warehouses near the ports of Los Angeles and Long Beach, Calif., the gateway complex that is a major chokepoint adding to global supply-chain snarls, reached 1% in the quarter. The region’s vacancy rate was 2.3% in the same quarter of 2020.

The Boston, central New Jersey and Charleston, S.C., markets showed a 1.9% vacancy rate during the quarter, the lowest rates outside of the Los Angeles region, according to CBRE.

“Space in our markets is effectively sold out,” said Thomas Olinger, chief financial officer of logistics real-estate firm Prologis Inc., in an Oct. 15 earnings call. “In the last 90 days, supply-chain dislocations have become even more pronounced, with customers acting with a sense of urgency to secure the space they need.”

Here is retail inventory data indexed to February 2020.

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