Industrial development is settling into a more measured pace after years of rapid expansion, according to our latest industrial report. In 2024, construction starts dropped to 236 million square feet, a 35% decline from 2023 and over 60% from 2022. Vacancy rates are expected to stabilize before ticking down by mid-2025, while the development slowdown is likely to continue.
Other key highlights:
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National in-place rents rose 6.6% Y-o-Y to $8.30 per sq. ft.
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The gap between in-place rents and new lease rates narrowed to $2.04 per sq. ft. in December, down from $2.50 six months ago
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The national industrial vacancy rate reached 8% in December, doubling from below 4% two years ago
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In 2024, 358M square feet of industrial space was delivered, a sharp decline from the 1B+ square feet completed in 2022-2023, but still a higher yearly total than any year before 2020
Regional highlights:
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New Jersey recorded the highest industrial rent growth in the U.S., with in-place rents rising 9.8% YoY to $11.35 per sq. ft.
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Orange County had the lowest industrial vacancy rate nationwide at 4.2%
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Phoenix remained the nation’s most active market in industrial development, with 22.4M square feet under construction as of December
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Chicago’s development pipeline shrank by 5.6M sq. ft. Y-o-Y to 7.6M
For more in-depth market insights, including vacancies and asking rates across the top 30 industrial markets, read our report here: https://www.commercialedge.com/blog/national-industrial-report/
