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Industrial deliveries slowed during Q3 2020 and we expect that trend to continue as many developers are delaying new developments on hold with uncertainty in the market.
Key Takeaways
- Industrial net absorption for Q3 2020 was negative for the first time this year. COVID-19 is the alleged culprit for the drop in absorption but net absorption for the year remained positive, primarily due to a strong first quarter.
- With no end in sight for the pandemic, we expect that absorption will continue to decrease due to uncertainty in the market. However, the Charlotte market remains in good position to bounce back as deals are still being signed but with less frequency.
- A few leases of note were signed during Q3 2020 were: Midwest Air Technologies leasing 316,900 SF at Charlotte Intermodal Logistics Center, Amazon taking 172,000 SF at the Wilkinson Commerce Center, and Power Distributors taking 195,197 SF at Clarius Park, all located in the Airport submarket.
- Investment activity remains relatively slow for industrial assets but there were still a few transactions to note. The Silverman Group acquired three buildings in Rock Hill’s Legacy Park East, paying $35.9 Million for two existing buildings plus an additional land site for future development. Mechanical Systems & Services purchased the building they currently occupy at 11524 Wilmar Blvd. for $14,125,000 from Bain Capital and RealOp Investments.
Summary Statistics
| Q3 2020 Charlotte Industrial Market | Warehouse | Flex |
| # of Existing Buildings | 3,113 | 721 |
| Total Inventory SF | 205,917,305 SF | 25,956,855 SF |
| Vacancy Rate | 7.40% | 6.80% |
| Absorption SF | (195,870) SF | 86,982 SF |
| New Construction | 4,290,029 SF | 145,500 SF |
| Under Construction | 3,858,120 SF | 141,642 SF |
| Asking Rents | $6.08 PSF | $11.97 PSF |
A Note Regarding COVID-19 - As we publish this report, the U.S. and the world at large are facing a tremendous challenge, the scale of which is unprecedented in recent history. The spread of the novel coronavirus (COVID-19) is significantly altering day-today life, impacting society, the economy and, by extension, commercial real estate. The extent, length and severity of this pandemic is unknown and continues to evolve at a rapid pace. The scale of the impact and its timing varies between locations. To better understand trends and emerging adjustments, please subscribe to Colliers’ COVID-19 Knowledge Leader page for resources and recent updates.
