Top 5 Emerging Industrial Markets in 2024

In the ever-evolving industrial sector, the Southern and Southeastern regions have taken the forefront on our list of emerging industrial markets, which we’ve identified with the use of CommercialEdge data. Their rise as industrial areas is a multifaceted success story, characterized by a growing inventory of industrial spaces, robust transactional activity and resilient job markets, all indicative of markets poised for continued growth in the sector.

Notably, Florida boasts two markets on our list. Tallahassee, Fla., stood out with an impressive 4.2 percent year-over-year job growth, securing the second spot in this category of all industrial markets. Robust employment expansion points to a thriving local economy, fueling demand for industrial space, as businesses adapt to shifting market dynamics. Expanding our focus beyond Florida, other Southern markets have demonstrated remarkable growth in various aspects. Baton Rouge, La., leads in year-over-year stock growth, with nearly 3.5 million square feet of industrial space underway at the end of 2023. Mobile, Ala., also plays a significant role with 3.3 million square feet in development, accounting for a substantial 8.6 percent of the total industrial stock.

Leveraging CommercialEdge data, we delve into the narratives of these thriving markets, highlighting their dynamic contributions to the nation’s industrial landscape.

4. West Palm Beach-Boca Raton

Also in Florida, the West Palm Beach–Boca Raton region has established itself as a thriving industrial market. Its growth can be credited to strategic focus on industrial development, favorable market conditions and appealing investment opportunities. Furthermore, its seventh-place ranking in year-over-year job growth solidifies its status as a notable player in the state's industrial landscape.

As of the end of 2023, CommercialEdge finds that West Palm Beach–Boca Raton featured a robust 1.9 million square-foot under-construction pipeline, constituting an impressive 3.8 percent of the existing industrial inventory. Despite economic fluctuations, South Florida has demonstrated resilience and continued growth over the years. This stability and economic development have contributed to the region's appeal as a hub for industrial investment.

The market also recorded a total of $204 million in industrial transactions in 2023, with properties trading at an average of $233.52 per square foot. It's worth noting that despite having one of the highest asking prices per square foot among surveyed markets, the region achieved a commendable 14.5 percent year-over-year increase in the average sale price.

5. Oklahoma City, Okla.

Oklahoma City has emerged as a significant industrial market due to its impressive industrial inventory— surpassing 95 million square feet—and its central location within the U.S. The cost of doing business within the market is often lower compared to other major industrial hubs or coastal ones. This cost-effectiveness extends to factors like real estate prices, labor costs and utilities, making it an appealing choice for industrial operations.

By the end of 2023, Oklahoma City stood out with over 2.9 million square feet of industrial space actively under construction, CommercialEdge data shows. This accounts for a notable 3.0 percent of the market's total industrial inventory.

Furthermore, Oklahoma City has showcased its industrial vibrancy through robust sales activity throughout 2023. The market witnessed total industrial sales amounting to $87 million, with properties commanding an average price of $55.73 per square foot.

Methodology

The methodology behind the Top 5 Emerging Industrial Markets ranking leverages data from CommercialEdge, complemented by an analysis of the U.S. Census Bureau’s annual employment growth rate. Our rankings are determined based on metrics recorded up until December 2023.

Factors considered in our methodology encompass the volume of industrial construction underway, industrial sales volume for the year 2023, pricing per square foot, the annual change in price per square foot and job growth specific to the industry. We believe this ranking methodically balances the considerations of growth potential and the overall size of the market.