Availability Holds Steady
The national overall availability rate was unchanged, remaining at 18.1%. The Class A availability rate fell slightly, dipping by 20 basis points to 19.0%. Austin registered a 210 basis point quarter-on-quarter decrease in its Class A rate, falling to 13.3%. The Class A rate also fell sharply in Charlotte, dropping by 140 basis points to 17.4%.
Asking Rents Stable
On a quarterly comparison, the national overall asking rent fell by 0.1% from $34.39 to $34.37 but has jumped 2.4% year-onyear. Class A asking rent increased by 0.8% to $39.08 in the third quarter and has jumped by 4.9% compared to the third quarter of 2017.
Trailing Leasing Pushes Higher
National four-quarter trailing leasing (the sum of activity over the last four quarters) totaled 230.7 million square feet (msf), an increase of 11% from the 208.8 msf total in the third quarter of 2017.
"Inflation has been contained throughout much of this recovery cycle. Low borrowing costs, cheap oil and gas and subpar wage growth have kept inflation in check. Controlled costs may be a distant memory by 2019. Interest rates are now rising. Labor shortages boosted construction costs quite some time ago; rising prices for materials such as lumber are eroding the margins of developers."
Keith DeCoster, Savills Studley Research