The Memphis industrial market finished the year strong by adding almost 1 million square feet of net absorption in the fourth quarter, bringing the 2017 total to more than 4.3 million square feet.

It also marked the 18th consecutive quarter of positive net absorption for the Memphis market, capping off a more than four-year span that has seen more than 23 million square feet of space absorbed, according to brokerage firm CBRE’s Q4 Industrial MarketView report.

“The fundamentals of the Memphis area industrial market, including our low vacancy, increasing lease rates and strong absorption, continue to demonstrate the strength of the region as a logistics hub,” CBRE vice president Tony Argiro said. “With a strong close to 2017, the Memphis market is well positioned to absorb the nearly 5.4 million square feet of speculative construction which will be completed in early 2018.”

Currently, there is more than 6.3 million square of industrial space under construction in the market, 5.4 million of which is speculative space.

Leading the way is the DeSoto County submarket, which is home to 75 percent of all speculative development in the market.

In the first quarter of 2018, DeSoto 55 Logistics Center Buildings A and B, I-22 Logistics Center, and Legacy Park Buildings 3 and 4 are all on track to be delivered, the latter of which will be at least partially occupied by Northwest Research upon completion. However, the details of that lease have not been released.

Meanwhile, delivery of Crossroads Distribution Center Building I has been pushed back to the second quarter of 2018. To the east in Marshall County, Panattoni’s 554,040-square-foot Building V in the Gateway Global Logistics Center is also expected to wrap up construction in Q2 2018.

“Asking rates are continuing to increase across the market, a trend that is driven in part by the continued high demand for new space and the current run of speculative development,” CBRE research analyst Lee Wright said in the report. “Overall asking rates have increased nearly $0.25 in the last year as total vacancy has decreased to post-recession lows. Vacancy decreased from 7.0 percent to 6.7 percent to end 2017.”

Two new construction projects were announced in the fourth quarter of 2017, including Panattoni’s 1.1 million-square-foot, build-to-suit warehouse for an undisclosed tenant in Marshall County, and IDI Gazeley’s 615,440-square-foot, build-to-suit for Amazon at 3282 E. Holmes Road in Shelby County.

New leasing activity remained strong in the fourth quarter, led by XPO Logistics’ 349,000-square-foot lease in Southpoint Distribution Center, Nortek’s 245,946-square-foot lease at 8740 S. Crossroad Drive, and Torin Elevator’s 182,136 square feet at 4949 E. Raines Road.

Additionally, JAM Industries renewed a 276,054-square-foot lease in the DeSoto Trade Center and Rockwell Automation renewed a 212,098-square-foot lease at 4020 Quest Way.

“Looking forward, rates are expected to rise and vacancy will remain at or near current levels,” Wright wrote. “Leasing momentum has shown few signs of slowing, and ongoing speculative developments indicate high demand for space.”