McAllen Industrial Real Estate Vacancy Drops to Record Low During Trump Visit
On Thursday, President Donald Trump visited McAllen, Texas where the warehouse market just set a new record for high occupancy.
McAllen, Texas – (Realty News Report) – Vacancy in the industrial real estate market has fallen to an all-time low as robust demand in the warehousing and distribution sector tightens commercial availability.
Located just north of the Mexican border, McAllen drew national attention on Thursday with a visit from President Donald Trump amid the continuing immigration debate. The city stretches to the banks of the Rio Grande in the southernmost part of Texas.
A report released Monday by commercial real estate firm CBRE shows McAllen’s industrial and warehouse vacancy rate dropped to 2.4 percent in the second quarter, a new record low. By comparison, the vacancy rate was nearly 13 percent in 2013, CBRE noted.
“Demand, like overall market activity, continues to be driven by the transportation and distribution logistics sector—third-party logistics providers (3PLs) accounted for about 25 percent of total space requirements in Q4 2018,” CBRE said in its McAllen Industrial Report for the fourth quarter.
Approximately 402,000 square feet of industrial space was under construction in the fourth quarter. CBRE also reported that four build-to-suit facilities were recently completed in nearby Pharr.
McAllen sits across the Rio Grande from Reynosa, Mexico, and is roughly 70 miles west of the Gulf of Mexico. The city’s population is estimated at about 143,000, while the combined Reynosa–McAllen metro area totals roughly 1.52 million people. Significant cross-border commerce flows daily across the international bridges connecting McAllen and Reynosa.
The city’s hot industrial market is unlikely to cool soon. CBRE reported that active users are currently seeking to lease about 1.6 million square feet—nearly matching or exceeding the available inventory. Cold storage facilities, in particular, remain in high demand.
