The industrial market has been relatively quiet for the first half of 2018. Deals are being made, but the inventory is low; thus, deal volume is down. However, we anticipate our inventory will increase by end of the year into early 2019.
Two spec-built buildings are in the pipeline in northeast Wichita and another is being built in south Wichita. The two buildings to the north will be 138,000 and 100,000 sf with a minimum of 30’ clear height dock and drive-in doors. Industrial lease rates are trending higher as inventory declines and new construction becomes available.
The inventory in buildings to purchase is even lower than leasing inventory. Industrial buildings that are placed on the market will sell if priced right. Although one would think the pricing would continue to increase due to low inventory, there seems to be a disconnect between what buyers are willing to pay and what sellers are willing to accept. This may be temporary but has been interesting to watch over the past 12 to 18 months. Quality built, well-located properties will sell quickly and at good prices, however, these are currently hard to find in the market.
Wichita can anticipate an active second half of the year in the industrial market. Businesses are expanding, which drives new construction. We expect the new buildings to lease fairly quickly and our inventory to remain historically low with anticipation that sales prices and lease rates will move upward.