Industrial

The e-commerce surge waned last year, reducing demand for industrial space. However, in 2024, this sector has rebalanced and is growing steadily.

The Southern California industrial markets saw signs of cooldown after years of growth, with increasing vacancies and slower rental growth.

After two years of record-level deliveries, the industrial development pipeline has slowed, but the long-term outlook remains bright.

Industrial valuations are rising despite market shifts, with the U.S. average sale price reaching $142 per square foot as of May.

The U.S. industrial vacancy rate was 5.2% at the end of April, unchanged month-over-month as demand for space has been moderating.

The industrial vacancy rate was 5.2% in March across the U.S., up 20 basis points from the previous month.

Despite the decline in sales over recent quarters, the average sale price of industrial properties has remained high, increasing by 9.6% quarter-over-quarter and 2.0% year-over-year.

New industrial starts in 2023 totaled 314.6 million square feet, down significantly from the 593.2 million square feet in 2022.

Due to tighter underwriting policies and more expensive capital, transaction activity will continue to diminish in 2024.

Port activity normalized, manufacturing surged in North America, and interest rate hikes dampened transaction activity and new development.