Industrial National Report

Transitionary period coming to a close. After ending 2022 at an all-time low, industrial vacancy has now risen for six straight quarters, to 6.1 percent at the midpoint of 2024. Over the same span, nearly 629 million square feet was delivered nationwide, stoking a 3.5 percent increase to inventory. While vacancy in June was still 130 basis points below the pre-pandemic average, additions to vacant stock, including from new supply, have reined in a previously red-hot pace of rent growth. The three-month span from March to June marked the first quarterly drop in the average asking rent since early 2011, following a 44 percent climb over the five years prior. Nevertheless, a narrowing pipeline suggests property metrics should improve after 2024. As of June, over two-thirds of active construction was slated to deliver before year’s end. Additionally, more than one-fifth of the space underway is located in only five major metros. As proposals with established timelines for 2025 and beyond represent under 5 percent of total stock, completions may fall short of long-term demand in most markets, as tenants frequently favor newer and higher-tech facilities.