Prince George’s County Industrial Market Trend Report Predicts Growth in 2015
NAI Michael released its fourth quarter market report recently, which analyzes vacancy rates, average rental rates and the construction pipeline, as well as major sale and lease transactions. What this report forecasts is a positive absorption and rental rate growth for this year.
Moving into 2015, vacancy should decrease due to the positive absorption in the market. Conversely, rental rate growth will likely increase over the course of the year, and a boom in the ecommerce sector could spark companies to swallow up available warehouse space quickly. As for sales prices, though the current averages should hold in 2015, industry trends from 2013 and 2014 dictate that a decrease in sales volume is likely due to the significant amount of product that has been traded.
Additionally, the few scheduled deliveries in the construction pipeline will boost the supply in the market, which could create a temporary stabilization effect. “In the short-term, the increase in supply will lead to a slow-down in the absorption rate and maybe even push everything into a negative absorption situation, but that’s an artificial result,” said Lance Schwarz, Senior Vice President, NAI Michael. The four planned projects will deliver a combined total of more than 700,000 square feet to the Prince George’s County market, and all four are on schedule to be completed by Q3 2015.
So what does that mean for businesses in the area hoping to relocate or expand into commercial real estate properties?
“I would say, companies looking for new leases should look at taking a longer term lease approach and locking in rental rates now, especially due to growth coming down the pipeline,” said Schwarz. “Increased growth in the e-commerce and construction sectors will continue to be a demand driver for warehouse space in our market. We also anticipate GSA warehouse leasing to increase in 2015, which should also help with absorption.”
In summary, the industrial market is expected to strengthen through the first quarter of 2015, and positive growth should continue as the year moves on. Read the full market report from NAI Michael to learn more about the forecast for industrial real estate in Prince George’s County, Maryland.