Industrial Reports

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 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.

Industrial vacancy rates rose 70 basis points from 3.9% in January 2023 to 4.6% in October but remained unchanged month-over-month.

Sellers have yet to readjust price expectations, as buyers are unwilling to pay high prices amid expensive and limited financing options.

Competition for industrial space will increase in 2024 and 2025, but we anticipate construction starts to pick up again in 2026.