Industrial Report: Investment Activity Holds Firm
While vacancy has leveled off and construction remains active, supply trends continue to shift, according to Yardi Matrix data.
The industrial sector held its ground in August, with national sales volume reaching $33.8 billion in the first half of the year. Properties traded at an average of $129 per square foot, reflecting a stable pricing environment despite broader economic uncertainty.
While deal flow remains tempered by questions around interest rates and policy direction, the sector’s fundamentals continue to attract investor interest. Expectations of rate cuts and improving clarity around tariffs are contributing to a more optimistic outlook heading into the final months of the year.
Sales and pricing hold steady while rents rise
The industrial investment volume has shown remarkable consistency, with year-to-date sales volumes nearly matching those of the previous two years. Pricing has also held firm, with the national average sale price remaining at $129 per square foot. While most markets are seeing subdued transaction activity, a few metros have posted notable gains, reflecting localized demand and strong logistics infrastructure. Some West Coast and Mid-Atlantic markets have recorded pricing sustained by high-value logistics and manufacturing assets. Overall, the picture remains one of stability, with investors cautiously navigating a landscape shaped by economic uncertainty.
National in-place rents rose to $8.63 per square foot, marking a 6.1 percent year-over-year increase. Philadelphia led all markets with 9.2 percent growth, supported by its expanding port and logistics sector. Meanwhile, the national vacancy rate edged up to 9.1 percent, driven by the delivery of new supply. The spread between newly signed leases and in-place rents narrowed to $1.45 per square foot, as elevated vacancy levels gave tenants more leverage in negotiations.
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Development activity remains elevated as pipeline shifts
As of July, 340 million square feet of industrial space were under construction nationally, representing 1.7 percent of total stock. Year-to-date completions reached 170.5 million square feet. Planned projects account for an additional 1.9 percent of inventory. Phoenix leads all markets with 16.9 million square feet underway, while Dallas–Fort Worth follows with 30.6 million square feet. Markets like the Bay Area are seeing increased demand for high-tech industrial space, driven by growth in AI and hardware production. At the same time, planned activity is beginning to moderate in response to elevated vacancy and tighter lending conditions.
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