Midlands Big-Box Supply Begins to Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
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Should l Buy CSGP?
Source: Newsfilter
- Supply Decline Trend: According to CoStar data, big-box warehouse supply in the Midlands has begun to fall after the peak at the start of the year, decreasing by approximately 5 million square feet in recent months due to strong demand and a moderating construction pipeline, although supply remains historically high at around 30 million square feet.
- Surge in Demand: Many occupiers are now moving earlier to secure space, particularly in established distribution locations with strong motorway access, driving approximately 6 million square feet of take-up across the Midlands in the opening months of this year, reflecting a pressing demand for quality warehouse space.
- Construction Activity Slows: With around 70% of the region's big-box space pre-let, new availability is limited in the coming months, and the current pipeline stands at 9.3 million square feet, which is 40% smaller than two years ago and only half of its 2022 peak.
- Tightening Market Conditions: The tightening market conditions are likely to stabilize incentives and rental levels after a period of subdued activity, and while rental growth may remain selective, the balance of power may be beginning to shift modestly back toward landlords, particularly those owning high-quality warehouses.
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Analyst Views on CSGP
Wall Street analysts forecast CSGP stock price to rise
13 Analyst Rating
8 Buy
4 Hold
1 Sell
Moderate Buy
Current: 36.440
Low
48.00
Averages
74.92
High
101.00
Current: 36.440
Low
48.00
Averages
74.92
High
101.00
About CSGP
CoStar Group, Inc. is a provider of online real estate marketplaces, information, analytics, and three-dimensional (3D) digital twin technology in the property markets. The Company operates through two segments, which include Commercial Real Estate and Residential Real Estate. Its Commercial Real Estate segment offers commercial real estate information and analytics, online marketplaces, and 3D digital twin technology. Its brands include CoStar and LoopNet. Its CoStar offers subscription-based access to its platform of commercial real estate intelligence. Its LoopNet is a commercial real estate marketing site which enables property owners, landlords, and brokers to advertise properties for sale or lease on a site. Its Residential Real Estate segment hosts marketplaces which aggregate consumer demand for homes to rent or buy and sell marketing and leads to the agents, owners, landlords, and property management companies to reach consumers with offerings.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Midlands Big-Box Supply Begins to Decline
- Supply Decline Trend: According to CoStar data, big-box warehouse supply in the Midlands has begun to fall after the peak at the start of the year, decreasing by approximately 5 million square feet in recent months due to strong demand and a moderating construction pipeline, although supply remains historically high at around 30 million square feet.
- Surge in Demand: Many occupiers are now moving earlier to secure space, particularly in established distribution locations with strong motorway access, driving approximately 6 million square feet of take-up across the Midlands in the opening months of this year, reflecting a pressing demand for quality warehouse space.
- Construction Activity Slows: With around 70% of the region's big-box space pre-let, new availability is limited in the coming months, and the current pipeline stands at 9.3 million square feet, which is 40% smaller than two years ago and only half of its 2022 peak.
- Tightening Market Conditions: The tightening market conditions are likely to stabilize incentives and rental levels after a period of subdued activity, and while rental growth may remain selective, the balance of power may be beginning to shift modestly back toward landlords, particularly those owning high-quality warehouses.
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- Leasing Activity Growth: Despite the East Quarter accounting for over 30% of leasing activity in the Leeds Central Business District in 2025, most transactions were mid-sized lettings, indicating an increasing influx of high-profile tenants that is enhancing market vibrancy.
- Stable Vacancy Rate: The vacancy rate in the Leeds Central Business District has remained stable at around 12% over the past three years, although it has risen from a cyclical low of 6% in 2020; the withdrawal of older stock has offset limited completions at Aire Park, keeping net absorption relatively flat.
- Optimistic Market Outlook: As the Aire Park scheme matures, it is expected to attract more high-profile tenants, further driving growth in Leeds's office market, especially as its strong ESG credentials and new-build specifications appeal to more businesses.
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- Market Divergence: While national prices remained stable, significant year-over-year growth disparities emerged across major markets, with Philadelphia and Baltimore posting gains of approximately 4% and 7%, respectively, highlighting steadier demand in these regions.
- California and Texas Markets: In contrast to the East Coast, several large markets in California and Texas, such as Austin and Dallas-Fort Worth, experienced declines in median sale prices over the past year, suggesting a rebalancing rather than distress in these areas.
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- New York Construction Trends: Since peaking in 2018, New York's construction volumes have sharply declined, totaling just 5.7 million sq. ft. in 2025, one of the lowest levels this century, reflecting developers' cautious approach to speculative building.
- Market Demand Shifts: While demand for trophy office space in New York remains strong, developers are increasingly linking new construction to securing anchor tenants, which may impact future building activities and market dynamics.
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Midlands Big-Box Supply Begins to Decline
- Supply Decline Trend: According to CoStar data, big-box warehouse supply in the Midlands has begun to fall after the peak at the start of the year, decreasing by approximately 5 million square feet in recent months due to strong demand and a moderating construction pipeline, although supply remains historically high at around 30 million square feet.
- Surge in Demand: Many occupiers are now moving earlier to secure space, particularly in established distribution locations with strong motorway access, driving approximately 6 million square feet of take-up across the Midlands in the opening months of this year, reflecting a pressing demand for quality warehouse space.
- Construction Activity Slows: With around 70% of the region's big-box space pre-let, new availability is limited in the coming months, and the current pipeline stands at 9.3 million square feet, which is 40% smaller than two years ago and only half of its 2022 peak.
- Tightening Market Conditions: The tightening market conditions are likely to stabilize incentives and rental levels after a period of subdued activity, and while rental growth may remain selective, the balance of power may be beginning to shift modestly back toward landlords, particularly those owning high-quality warehouses.
See More
COSTAR GROUP INC: CITIGROUP LOWERS TARGET PRICE FROM $100 TO $70
Company Announcement: Costar Group Inc. has announced a significant reduction in its target price.
New Target Price: The target price has been cut from $100 to $70.
See More
Leeds East Quarter Sees Rising Office Demand
- Demand Shift: CoStar data indicates that the share of leasing activity in Leeds's traditional City Core has decreased from an average of 80% over five years to 60% in 2025, highlighting the growing appeal of the East Quarter's Aire Park, particularly among professional and financial services firms.
- Leasing Activity Growth: Despite the East Quarter accounting for over 30% of leasing activity in the Leeds Central Business District in 2025, most transactions were mid-sized lettings, indicating an increasing influx of high-profile tenants that is enhancing market vibrancy.
- Stable Vacancy Rate: The vacancy rate in the Leeds Central Business District has remained stable at around 12% over the past three years, although it has risen from a cyclical low of 6% in 2020; the withdrawal of older stock has offset limited completions at Aire Park, keeping net absorption relatively flat.
- Optimistic Market Outlook: As the Aire Park scheme matures, it is expected to attract more high-profile tenants, further driving growth in Leeds's office market, especially as its strong ESG credentials and new-build specifications appeal to more businesses.
See More
U.S. Home Price Growth Remains Modest Year-Over-Year
- Year-over-Year Price Growth: In March 2026, the national median home price in the U.S. stood at $385,000, reflecting a modest 1.3% increase from the previous year, indicating a gradual transition towards a more balanced housing market without signs of acceleration.
- Market Divergence: While national prices remained stable, significant year-over-year growth disparities emerged across major markets, with Philadelphia and Baltimore posting gains of approximately 4% and 7%, respectively, highlighting steadier demand in these regions.
- California and Texas Markets: In contrast to the East Coast, several large markets in California and Texas, such as Austin and Dallas-Fort Worth, experienced declines in median sale prices over the past year, suggesting a rebalancing rather than distress in these areas.
- Impact of Housing Type: Nationally, condo prices showed modest year-over-year gains, but outcomes varied widely across large markets, indicating that local supply conditions and affordability constraints played a more significant role in shaping growth than national trends alone.
See More
Record Gap in Office Construction Volumes Between London and New York
- Construction Volume Gap: By the end of 2025, London had 16 million sq. ft. of office space under construction, exceeding New York's 5.7 million sq. ft. by over 10 million sq. ft., marking the largest differential in over 20 years and highlighting London's robust market performance.
- New York Construction Trends: Since peaking in 2018, New York's construction volumes have sharply declined, totaling just 5.7 million sq. ft. in 2025, one of the lowest levels this century, reflecting developers' cautious approach to speculative building.
- Market Demand Shifts: While demand for trophy office space in New York remains strong, developers are increasingly linking new construction to securing anchor tenants, which may impact future building activities and market dynamics.
- Future Outlook: Preliminary data indicates that London's construction volume fell below 16 million sq. ft. in Q1 2026 for only the third time since 2021, suggesting that the gap between the two cities may narrow in the coming years, potentially reshaping competitive dynamics.
See More
Third Point Exits CoStar Stake, No Proxy Fight Planned
- Shareholder Shift: Activist hedge fund Third Point has completely divested its stake in CoStar Group, indicating a significant loss of confidence in the company's future, particularly as CoStar's shares have plummeted over 50% in the past 12 months.
- Failed Strategic Push: Third Point's initial plan to push CoStar to focus on its core operations has faltered, as CEO Andy Florance continues to drain a majority of operating income into Homes.com and related acquisitions, leading to the fund's exit.
- Market Reaction: CoStar's stock saw a rise in January following Third Point's announcement of a proxy fight, but investor confidence has since waned, resulting in renewed pressure on the stock and highlighting concerns over corporate governance.
- Investor Letter: Loeb's letter to investors expressed that despite efforts to instigate change, the management's decisions are viewed as a “reckless drain” on the company’s operating income, further exacerbating pessimism regarding CoStar's future.
See More
