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North American Industrial Big-Box Market Reaches Record Highs with Activity Driving Sector Strength


Colliers International reports robust rebounds for big-box demand with substantial construction completions in 2015 indicating ongoing strength for 2016

NEW YORK, NY (March 2, 2016) — Colliers International Group Inc. (NASDAQ:CIGI, TSX:CIG) has released its Industrial Logistics & Transportation Solutions 2016 Outlook – Big-Box Market Report, a comprehensive analysis of industrial big-box transactions in North America’s eight largest distribution markets. The study finds that 2015 was one of the strongest years to date for the industrial real estate sector in North America, with the big-box market leading in construction and transaction activity. For example, in 2011, 9 million square feet of big-box space was built, while in 2015, 61 million square feet was delivered.

“Building on our global logistics report released last year, this report is a more detailed snapshot of how the shift from bricks & mortar to e-commerce is affecting businesses everywhere,” said Dwight Hotchkiss, National Director, Industrial | USA for Colliers International. “Businesses are now thinking more specifically about supply chains and are pivoting focus to delivery times. This is leading to an incredible surge in the big box sector, which we define as a 300,000 square foot or larger building primarily used for distribution."

Colliers’ research of early activity in 2016 indicates another strong year for occupier demands—especially as the growing pressure from e-commerce for swift logistics will continue to influence this space across North America and beyond.

Additional key takeaways from this report include:

  • Top 10 occupier leases show impressive market investment. The top ten occupier leases in 4Q 2015 totaled 10,620,000 square feet. The top ten sales showed $470 million dollars invested.
  • Substantial recovery since 2011. In 2011, speculative development totaled 623,000 square feet; while in 2015, it totaled 34.8 million square feet. Cap rates dropped from 7.16 percent to 5.99 percent in 2015. And cap rates continue to drop into 1Q 2016. Finally, average effective net rent showed a 28 percent gain, from $3.55 per square foot in 2011 versus $4.54 net per square foot in 2015.
  • Vacancy rates hit lowest levels in 2015. In Q2 2015, the vacancy rate hit 7.02 percent; it’s lowest of the year. While 2015 ended with a slight vacancy increase at 7.32 percent, this is due to speculative construction that had been completed during the year.
  • Considerable construction still to come. In 2015, the market saw construction completion of 60 million square feet, with an additional 74 million square feet of construction underway for 2016 delivery.

Key market highlights include:

  • Atlanta: Big-box construction activity continues to grow, with 10.7 million square feet of new big-box construction currently underway.
  • Chicago: Big-box construction is also driving this market, with 9.2 million square feet of new construction underway.
  • Dallas: Despite a slight downturn in leasing activity in Q4 2015, big-box construction activity continues to expand, with 9.8 million square feet of new construction underway.
  • Houston: With just 1.8 million square feet of new big-box development completed in 2015, the current 6.2 million square feet underway demonstrates substantial growth.
  • Greater Los Angeles: Leasing activity increased 4.8 percent in Q4 2015 from Q3, and construction activity continues to grow, as well.
  • Pennsylvania and New Jersey: Despite a 38.9 percent decrease in leasing in Q4 2015 from the prior quarter, construction activity continues to grow, from 12.1 million square feet completed in 2015 to 13.3 million square feet currently underway.
  • Northern/Central New Jersey: Leasing activity in Q4 2015 increased an impressive 36.3 percent over Q3, with construction activity following suit; currently 3.8 million square feet of new big-box space is underway.
  • Toronto: Leasing in Q4 2015 jumped a notable 296 percent over Q3, bringing total big-box leasing volume to 5.74 million square feet in 2015.

For more details, the full Colliers International 2016 Outlook – Big-Box Market Report is available for download at:

photo:Elliot Golan
Elliot Golan
Director, Public Relations and Marketing
+1 206 695-4208
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