Port Markets Lead Industrial Activity

Industrial demand continues to soar, with nearly every port across the nation seeing record activity, according to the latest CommercialEdge industrial report. While activity is concentrated nearby the ports of Los Angeles and Long Beach and the Port of New York and New Jersey, smaller markets are keeping busy, too. The Savannah-Hilton Head market—housing the third-busiest port in the country—is undergoing a $150 million expansion spearheaded by the Georgia Ports Authority, aiming to increase its container capacity by 25 percent until summer.

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National average full-service equivalent listing rates averaged $6.46 per square foot in January, up 400 basis points year-over-year. Although some of the largest growth in industrial rents took place in California and northeastern port markets such as Inland Empire (6.0 percent year-over-year) and New Jersey (5.9 percent), Nashville led the way in this sense: Industrial rents averaged $5.20 per square foot in January, representing a 6.3 percent increase when compared to January 2021.

Meanwhile, national industrial vacancy stood at 5.5 percent in January, a 20-basis-point drop from the prior month. While industrial supply continues to remain tight in most of Southern California, Midwestern markets with below-average industrial vacancies such as Columbus (1.3 percent) or Indianapolis (2.6 percent) recorded the weakest rent growth in the country.

The active pipeline included 587.8 million square feet of industrial space under construction as of January—accounting for 3.5 percent of total stock­—while when taking into account planned projects, the rate is pushed to 7 percent of existing stock. Some of the largest pipelines are located in popular logistics hubs such as Indianapolis, where more than 29 million square feet of industrial space was under construction at the end of January, or 9.4 percent of the metro’s existing stock.

Read the full CommercialEdge report.