ST. LOUIS—As reported in GlobeSt.com, the US industrial market just had one of its best years, largely due to the intense demand for new distribution facilities, and that dynamic is apparent in several key Midwest markets. Cushman & Wakefield just released its year-end study of the St. Louis industrial market, and found that it experienced the highest amount of annual positive absorption for the past 30 years, with 4.97 million square feet. In the fourth quarter alone, tenants absorbed 1.83 million square feet.

“On top of a record year of absorption, we also saw a record year of inventory,” says Brian Ungles, Cushman & Wakefield managing principal. “After adding 3.20 million square feet of new inventory in the first three quarters, another 2.82 million square feet were added in the fourth quarter – bringing the total new inventory to 6.01 million square feet for the year. This is the highest amount of new construction since 2001 when 6.05 million square feet were delivered.”

The vacancy rate did tick up, but that due to the massive amount of new construction. After developers added 3.66 million square feet of new speculative inventory in 2016, the vacancy rate ended the year at 6.6%, well below the historic average of 8%.