Why you should be considering your options more than 18 months before your lease expires?
As we start the second quarter of 2019, the availability of industrial property to lease or purchase continues to decline. The industrial vacancy rate at the end of Q1 is now estimated to be at 1.2% for all of Metro Vancouver, the lowest it has been in well over a decade.
This percentage equates to approximately 2,450,000 square feet of vacant and available space of the total 207,000,000 square feet of industrial property existing in Metro Vancouver. With the average annual absorption ranging between 3,000,000 and 5,000,000 square feet over the past few years and minimal new supply coming to market for the balance of the year, it is reasonable to expect the vacancy to continue to trend downwards for the balance of the year to well below 1%. This lack of supply is cause for concern for occupiers of industrial property as the market is significantly imbalanced in the favor of landlords, which has been reflected in the roughly 30% appreciation in lease rates over the past 18 months across all markets.