Industrial vacancy in the Northland fell to 3.1 percent in the third quarter after three distribution tenants signed leases totalling 840,000 square feet, according to brokerage data released this week.
Why the Northland
The corridor's advantage is unglamorous: flat land, interstate access at two points, and a labour shed that reaches into both Clay County and the Kansas side without a river crossing.
The disadvantage is equally unglamorous. Sites large enough for modern distribution — 40-foot clear height, 300-foot truck courts — are increasingly spoken for, and the remaining parcels require grading that adds $6 to $9 per square foot to the pad.
- Industrial vacancy, Northland: 3.1%, down from 5.8% a year ago
- Average asking rent: $8.40 per square foot triple net, up 14% year over year
- Space under construction: 1.9 million square feet, 71% pre-leased
- Largest single lease: 390,000 square feet to a national retailer
The jobs arithmetic
Modern distribution employs far fewer people per square foot than the warehouses it replaces. A 390,000 square foot facility with heavy automation might employ 180 people across three shifts, where a comparable 1990s building would have held 400.
That is why the sector can add jobs and add space at very different rates, and why the metro's logistics employment growth of 1,500 in the quarter came alongside nearly 2 million square feet of new inventory.
We are building more roof and hiring fewer people per roof. Both things are true.
An industrial developer active in the corridor
Danny Okafor
Danny writes about jobs, small business and the regional economy. He spent six years covering commercial real estate before joining the newsroom.
