That puts the market on pace to match 2018’s absorption total of 2.78 msf.
The vacancy rate across all industrial properties sits at 7.6 percent, down three points from the same point last year and well below the historical average of 9.5 percent.
But what trends are driving the market when we take a closer look at the data? Here are five findings after dissecting the year’s leasing a little more closely:
1. Ceilings are better when they’re higher
Clear heights continue to move upward, with 2.89 msf of deals taking place in 24-foot-clear buildings or higher. A higher number of gross deals have happened in lower-ceiling properties, but larger tenants are by and large looking for higher ceilings. In fact, the average deal in a 32-foot-clear building this year has been for more than 60,000 sf, whereas the average lease in a 14-foot-clear property has been for about 6,500 sf.
2. Mid-range leases are all the rage
Out of 318 leases totaling 5.24 msf, more than 2 msf of those deals were in the 20,000-50,000 sf range. That’s about 38.5 percent of the market, and more than double the next largest range, the 50,000-100,000 sf deal. In terms of lease count, about 20 percent of all leases fell in that size range, with only smaller deals putting up rival volumes.
3. Plymouth, Fridley, Roseville driving deals
The three busiest cities by leasing activity are Plymouth, Fridley and Roseville, with 407,000 sf, 400,700 sf and 392,000 sf leased year-to-date, respectively. Interestingly, deals have averaged a much larger square footage in the latter two cities, with just 10 leases each, while Plymouth’s square footage comes from 24 distinct deals.
4. Manufacturing companies are making waves
Of approximately 4.2 msf where a company type could be determined, manufacturing companies made up nearly half. About 1.76 msf of space this year has been leased by companies in that industry, with chemical, medical supplies and printing manufacturing companies topping the market. The next-largest category was wholesale traders, which made up about 589,000 sf. Nearly 1 msf couldn’t be categorized.
5. The North is leading the market
The Northeast (1.76 msf) and Northwest (1.52 msf) submarkets have seen the most action so far this year, combining for about 63 percent of all leasing to date. And when you focus on the largest leases only, the disparity grows. Of the 25 largest occupiers to sign leases this year, 10 ended up in the Northeast and eight went Northwest – likely due to higher availability of land for new construction and existing space in the northern markets.
