Despite a flurry of building activity in the warehouse sector, the industrial vacancy rate for the Savannah market area continues to drop as Savannah’s port keeps growing faster than any other in the country.
The Savannah industrial market, which includes Chatham, Bryan, Effingham and Liberty counties in Georgia and Jasper County in South Carolina, gained 1.13 million square feet in the fourth quarter of 2016, according to Colliers International.
However, the market absorbed 1.22 million square feet during the same time, according to Colliers principal David Sink.
“The vacancy rate decreased from 2.46 percent to 2.43 percent in the last quarter,” Sink reported.
“Currently, there is 5.1 million square feet under construction, but nearly 3 million of that is build-to-suit, meaning it’s already spoken for,” he said. “That leaves just over 2 million square feet still available for lease.”
That might be more than enough for any other market, but Savannah’s boasts the fastest-growing container port in the country and that much-sought-after warehouse and distribution space around the port is being gobbled up almost as fast as it is available.
Georgia Ports Authority posted record container volumes last month and ports executive director Griff Lynch told his board last week that he expects sustained market strength going forward.
Last fall, in his first State of the Ports speech, Lynch urged private investors to ramp up their construction of speculative warehouse and distribution space near the port. “The Savannah market is still calling for additional construction,” he said. “It is the No. 2 growth market in the nation when it comes to absorption as a percentage of building inventory. Over the past 15 years, our cargo expansion has outpaced all other major U.S. container ports.”
As low as the overall industrial vacancy was at the end of 2016, the vacancy rate for properties greater than 100,000 square feet is even lower, hovering right around 2 percent.
“We have more and more companies coming to talk to us about doing business with our port,” Lynch said. “The last things we want are missed opportunities because we don’t have the space available.”