AZBigMedia
Projected rents are more than adequate in many markets to justify additional development of warehouses and distribution centers, according to a new report from CBRE. Furthermore, Phoenix is positioned as a top market for this activity.
CBRE analyzed the gap between pro forma rents in various markets – the rental rates that developers can reasonably expect to obtain on newly built warehouses – and breakeven rents, which are the rents they’d need to cover overall development costs. In the 10 major markets that CBRE examined, the former exceeded the latter by 20 to 40 percent.
CBRE’s analysis found the largest rent spreads in Chicago (43 percent), Atlanta (38 percent), Phoenix (35 percent), Pennsylvania’s I-78/I-81 corridor (30 percent) and Los Angeles (27 percent).
