Through Q1 2025, U.S. industrial markets showed somewhat of a performance split: Sun Belt metro areas outpaced traditional coastal port hubs in rent growth, despite nationally rising vacancies and economic uncertainties: Per Yardi Research Data, national in-place industrial rents rose 6.8% year-over-year to $8.44 per square foot as of March, though monthly growth slowed to $0.01.<\/p>\n
Specifically, the port market of New Jersey remained the top market for industrial rent growth with in-place rent growing 11.3% year-over-year, but the broader trend favored Sun Belt metros \u2014 Nashville, Tenn. (up 10.2% to $6.58 per square foot); Atlanta (rising 9.5% to $6.21 per square foot); Miami (increasing 9.2% to $12.54 per square foot); and Dallas-Fort Worth (up 8.5% to $6.36 per square foot). These gains also surpassed port markets like Los Angeles (rising 7.3% to $15.19 per square foot) and Seattle (increasing 6.3% to $11.82 per square foot), indicating that tenant demand is moving to the Southeast and Southwest.<\/p>\n
However, vacancy rates told a more nuanced story: Nationally, the industrial vacancy rate rose 30 basis points to 8.5% in March, a sign of both the easing of demand and lingering oversupply from the recent construction boom. That said, Sun Belt markets showed mixed performance: Nashville, Tenn., (7.9%) and Atlanta (8.2%) remained below the national average, while Miami (11.5%) and Dallas-Fort Worth (10.0%) dealt with higher vacancies. In contrast, port markets \u2014 such as Orange County, Calif., (6.1%) and Bridgeport, Conn. (5.1%) \u2014 recorded some of the lowest vacancy rates nationwide. At the same time, high-cost markets \u2014 like Los Angeles (8.7%) and New Jersey (9.6%) \u2014 faced growing occupancy challenges.<\/p>\n
Meanwhile, leasing activity highlighted the Sun Belt\u2019s edge: Miami had the second-highest premium for new leases at $16.56 per square foot for a $4.02 spread over in-place rents. In this case, Charlotte, N.C., ($10.56 per square foot) and Atlanta ($8.86 per square foot) also saw strong tenant demand. Otherwise, the national average spread between new and existing leases narrowed to $1.92 per square foot, down $0.21 from February and indicating a cooling in rent growth. Bridgeport led the nation with a $4.64 per square foot spread, although markets like Miami and Charlotte remained among the few with spreads above $3.<\/p>\n