United States real estate, in the form of warehouses, distribution centers, and other property, continues to remain in high demand, according to data released this week by real estate firm .

In its “U.S. Industrial Availability Index,” CBRE reported that the availability rate for U.S. industrial real estate fell ten basis points to 7.2% in the second , which is its lowest level since 2000. CBRE said this represents the 32nd consecutive quarterly decline, with demand for industrial property continuing to outpace supply. What’s more, CBRE said this is the longest quarterly stretch of availability going back to 1988.

As has been the case for several quarters, CBRE said this demand is being paced by e-commerce growth and over all U.S. economic strength, with the total net absorption through the 55 markets CBRE follows coming in at 59 million square-feet for the quarter.

CBRE Managing Economist and Chief Data Scientist Tim Savage said in an interview that one main reason for the strength in the market goes back to what he called very favorable macroeconomic conditions for commercial real estate in general, especially on the industrial side.

“You can almost line up this data with quarterly growth in GDP,” he said. “It has been one of the longest expansions the U.S. has experienced in the post World War II era, and that is characterized by very low interest rates historically, and the recently passed tax reform, which is likely to benefit commercial real estate. There are also very favorable global conditions, in terms of the availability to capital. The availability of international capital and its appetite for commercial real estate is infinitely insatiable.”

The broader phenomenon, in the form of e-commerce, he explained, has not changed what people buy but how they buy it, which is greatly benefitting the sector, especially on the industrial side.

Looking ahead, CBRE said it expects declines in the U.S. industrial availability rate to flatten out, with the amount by which demand exceeded supply trimmed down to 22 million square-feet for the 12-month period ending in June from 65 million square-feet for the 12-month period ending in June 2017. CBRE said it defines availability as the “sum of vacant space plus space that is currently occupied but otherwise being marketed for use by new tenants.” 

Taking that a step further, CBRE noted that in the second quarter 39 U.S. markets posted declines in industrial availability from the first quarter and 21 reported increases, and four were unchanged.

“We are focused on things like fiscal and monetary policy, and we have to recognize we have not repealed the business cycle; nobody can repeal the business cycle,” he said. “There is still, behind the scenes, a general business cycle. It is a very long running . Employment growth has been robust, but it is slowing…and it is based on years of history here at CBRE we know employment growth is the strongest near-term driver of commercial real estate performance. We are forecasting that rate to continue to slow over the next few years, and that is the driver of our forecast.”

U.S. markets with the largest second quarter industrial availability declines were New Haven, Conn. (down 430 basis points), Tuscon (down 310 basis points), and Sacramento (down 260 basis points). On the other end, markets with increased availability were Pittsburgh (up 150 basis points), Louisville (up 140 basis points), and Allentown (up 130 basis points).

U.S. markets with the most potential, or attractiveness, according to Savage, are New Haven, due its proximity to Boston and New York City. He also said that Tuscon and Phoenix are emerging as secondary tech cities, adding that where there is tech, industrial will follow.”

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