While core industrial markets continue to thrive, Colliers International’s latest research report—10 Emerging U.S. Industrial Markets to Watch in 2017—explores the markets positioned to experience the most robust increases in demand from occupiers and owners. Learn more about one of these markets: Shenandoah Valley.
“The Shenandoah Valley market is a cost-effective alternative to markets further north in the Lehigh Valley and central Pennsylvania. The Port of Baltimore and the Port of Virginia provide rail access through CSX and Norfolk Southern, respectively. Combined with access to labor markets in Virginia, Maryland and West Virginia, these factors make the area particularly attractive to employers. This was most recently evidenced by Proctor & Gamble’s commitment to a multi-million-square-foot manufacturing and distribution facility in Martinsburg, WV—which will come online in 2018.” — John Lesinski, Executive Vice President | Northern Virginia
The Shenandoah Valley region offers a plethora of advantages including land available for development and proximity to the metro Washington, D.C., Baltimore and Ohio Valley population bases. The Shenandoah Valley continues to see robust demand, particularly in Frederick, VA; Winchester, VA; and Berkeley, WV.
The Virginia Inland Port is approximately 60 miles west of Washington, D.C. and occupies 161 acres of land. The terminal brings the Port of Virginia 220 miles closer to inland markets and enhances service to the Washington, D.C. and Baltimore metro region by providing rail service to terminals in Hampton Roads. The Virginia Inland Port also consolidates and containerizes local cargo for export.
Overall vacancy rates in the Shenandoah Valley finished 2016 at 6.6%—nearly cut in half since the high of 12.1% in 2009.
Overall net absorption in the Shenandoah Valley was positive for the seventh consecutive year, finishing 2016 at 1.6 million square feet. With robust demand and available land, the rate of positive absorption should continue to accelerate.
Warehouse demand was strong in the second half of 2016 with Home Depot, Millcroft Farms and Fiat-Chrysler leasing or moving into space. Abundant available land in the northern portions of the market will likely lead to new bulk development as vendors for Procter & Gamble and Chrysler seek more space in the region.
With lower levels of vacant space, asking rental rates increased 13.6% in 2016 over the previous year to reach $4.37 per square foot per year NNN. With the area gaining popularity and the pace of development not yet quenching demand, rental rates will likely continue to ascend in the coming year.
To learn more, explore the 10 Emerging U.S. Industrial Markets to Watch in 2017.