Back in black: McAllen industrial net absorption

​​McALLEN – Following a quarter of negative net absorption that broke a 14-quarter streak, the local industrial market returned to positive territory.

According to CBRE’s third-quarter market report, activity was healthy with gross absorption just shy of 210,000 sf. The third quarter was a strong one for "the stable, but usually low-profile McAllen market," the report said.​​​​

The vacancy rate declined from 5.3 percent in the second quarter to 3.8 percent. However, the majority of this decrease was due to database adjustments that removed 377,000 sf of vacant space from the market. These adjustments were the result of re-occupancy and building owners using available space in their buildings while continuing to market the property.

The average asking rate increased $0.08 per s​​f.

As the market entered the post-recession period, net absorption and leasing activity improved considerably. The buildup of demand during the recovery period saw relief and total industrial space requirements of active users in the market begin a downward trend, hitting a low of 830,000 sf in Q4 2016.

Local economic improvements, increased development, and new southbound commercial lanes at international ports renewed interest in the region. Demand for industrial space reached a cycle high of 1.65 million sf in the third quarter.