{"id":3300,"date":"2024-06-17T05:41:22","date_gmt":"2024-06-17T05:41:22","guid":{"rendered":"https:\/\/www.commercialsearch.com\/blog\/?p=3300"},"modified":"2025-11-12T12:47:37","modified_gmt":"2025-11-12T12:47:37","slug":"may-national-industrial-report","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/blog\/may-national-industrial-report\/","title":{"rendered":"Industrial Sector May Report: Navigating Higher Costs Amid Echoes of Record Supply"},"content":{"rendered":"

The recent national industrial report<\/a> published by CommercialCafe shows a market that\u2019s currently adjusting to an economic environment shaped by factors such as higher interest rates, labor costs and other expenses. Concurrently, the record level of new supply from recent years is leading to the normalization of vacancy rates.<\/p>\n

National Industrial In-Place Rents Up 7.4% Y-o-Y<\/h2>\n

In April, national in-place rents for industrial space averaged $7.96 per square foot, up $.11 from March and showing a 7.4% rise over the past year. This continues a trend of steady growth from last month with March rents up $.17 from February, reflecting a 7.3% year-over-year (Y-o-Y) increase.<\/p>\n

The Inland Empire in California reclaimed the top spot for the highest rate of in-place rent growth in April with a 12.5% increase in the last 12 months after briefly being surpassed by Miami in March.<\/p>\n

Miami followed closely with a 12% increase, while Los Angeles<\/a> (11.2%) and Orange County<\/a>, Calif., (9.4%) ranked third and fourth, respectively. On the opposite coast, New Jersey<\/a> led the Northeast with an 8.9% Y-o-Y increase.<\/p>\n

At the other end of the spectrum, Detroit<\/a> saw the lowest rent growth at 3.0% in the last year. Other markets with relatively low rent growth included St. Louis (3.5%); Kansas City, Mo. (3.6%); and Denver (4.1%).<\/p>\n

Vacancy Rates: Market Equilibrium<\/strong><\/h2>\n

As of April, the national vacancy rate stood at 5.2%, which is consistent with the previous month. Notably, industrial vacancies have largely returned to normal levels in the last year, following a period of exceptionally low vacancies post-pandemic.<\/p>\n

For instance, in April 2023, the national vacancy rate was 4.1% with markets like the Inland Empire, Los Angeles and New Jersey experiencing rates below 3.0%. Now, these markets have vacancy rates at or near 6.0%.<\/p>\n

Meanwhile, in April, Columbus, Ohio<\/a>, had the lowest industrial vacancy rate at 2.7%, followed by Kansas City<\/a> at 3%. Not far behind, Southern markets Nashville, Tenn. (3.6%); Charlotte, N.C. (3.8%); and Dallas-Fort Worth (3.9%) also had low vacancy rates, ranking third, fourth and fifth, respectively. In the West, Orange County, Calif., and Portland, Ore., had the lowest rates at 4%, while Bridgeport, Conn., led the East with a 4.5% vacancy rate.<\/p>\n

Oversupply Continues to Slow New Starts, Phoenix Remains Supply Frontrunner<\/strong><\/h2>\n

Currently, 401.6 million square feet of industrial space \u2014 representing 2% of total stock \u2014 is under construction, according to CommercialCafe. New industrial starts have continued to slow in 2024 with only 49.2 million square feet breaking ground through April.<\/p>\n

In the national industrial supply pipeline, Phoenix<\/a> leads with 41.8 million square feet under construction, followed by Dallas-Fort Worth<\/a> with 23.36 million square feet. In third place, Kansas City has seen an increase to 13.3 million square feet from 11.36 million square feet in April. Following in order, Atlanta has 12.03 million square feet under construction, while Chicago reported 11.11 million square feet under construction in May. Charlotte followed with 10.53 million square feet, and the Inland Empire has 8.1 million square feet under construction.<\/p>\n

As for percentage increase in supply under construction, the market with the leading pipeline size is Phoenix, which has 10.8% of its current inventory under construction. Next, Dallas-Forth Worth has 2.6% of its current inventory under construction, while Kansas City has 4.6%.<\/p>\n

Among the top five markets for rent growth, only Miami<\/a> \u2014 with 3.1% of its stock under construction \u2014 exceeds the 2% mark. Los Angeles (0.3% under construction) and Orange County, Calif., (0.4%) have minimal pipelines relative to their market sizes, and New Jersey’s pipeline (1.3%) is only slightly larger. Additionally, the Inland Empire\u2019s pipeline (1.2%) has significantly decreased from 32.6 million square feet under construction a year ago to 8.1 million square feet this month.<\/p>\n

Industrial Sales Reach $15 Billion in First 4 Months, Led by Western Powerhouses<\/strong><\/h2>\n

Industrial property sales in the U.S. reached $15 billion through April 2024, according to CommercialCafe. While the average sale price remained steady at $146 per square foot, there was a decrease in the overall number of transactions and total sales volume compared to previous years.<\/p>\n

In this case, Western markets emerged as the frontrunners by capturing nearly $6 billion in transactions. Namely, the Bay Area and Los Angeles were the frontrunners, contributing more than half of the total Western volume. The Bay Area led with $2.18 billion in sales \u2014 highlighted by one $1.2 billion deal last month<\/a> \u2014 and closely by Los Angeles at $1.35 billion. Dallas-Fort Worth ranked third with $1.01 billion in sales, followed by Chicago<\/a> with $834 million, Phoenix with $617 million and New Jersey with $612 million.<\/p>\n

For more information, check out CommercialCafe\u2019s full industrial report<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

The recent national industrial report published by CommercialCafe shows a market that\u2019s currently adjusting to an economic environment shaped by factors such as higher interest rates, labor costs and other expenses. Concurrently, the record level of new supply from recent years is leading to the normalization of vacancy rates. National Industrial In-Place Rents Up 7.4% Y-o-Y In April, national in-place rents for industrial space averaged $7.96 per square foot, up $.11 from March and showing a 7.4% rise over the past year. This continues a trend of steady growth from last month with March rents up $.17 from February, reflecting…<\/p>\n","protected":false},"author":3163,"featured_media":3301,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3300","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\nNavigating Higher Costs Amid Echoes of Record Supply<\/title>\n<meta name=\"description\" content=\"As the industrial market adjusts to higher interest rates, labor costs, and expenses, recent record new supply is normalizing vacancy rates.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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