Construction of warehouses with at least 300,000 square feet rose 77% in the last quarter of 2016, adding up to 25.5 million square feet, according to research from real estate brokerage firm Colliers cited by The Wall Street Journal.
However, demand from retailers for that kind of space has fallen, dropping 19.3% from the year-ago period, leading vacancy rates to climb 7.7% from 7.5% in 2015, according to the report. Such big-box warehouse construction is increasingly being built on a speculative basis: About 58.5 million square feet were built on spec, up from 34.8 million square feet the year before, and twice the pace of the construction of “build-to-suit” warehouses.
