Construction pipeline delivers record new product as vacancy begins to tick up
Records were shattered in the second quarter of 2023, as 4.1 million square feet (msf) of industrial product delivered to the Charlotte market. Deliveries more than doubled year over year, as only 1.7 msf was delivered in Q2 2022. The State Line submarket makes up 30% of product delivered, totaling more than 1.2 msf. This includes three buildings in the Carolina Logistics Park and two buildings in the Steele Creek Commerce Park preleased by Air Distribution Inc. at the end of 2022. Preleasing remains a trend, as 36% of product under construction has been leased up. With the most deliveries ever recorded hitting the market, vacancy increased 90 basis points year over year to 6.3%. Though vacancy swelled in Q2 2023, the increase allows for healthy availability of new industrial product to attract company relocations to the Charlotte market. Looking ahead, the trend of mass amounts of new industrial product delivered to the market will likely continue, with more than 15.3 msf set to deliver by the end of 2023.