The unprecedented level of industrial development seen in recent years has generated concerns of oversupply, and growing vacancies during the last year seemed to confirm them. The amount of industrial space currently being built is almost equivalent to pre-2020 levels, but with a different composition, according to our latest U.S. industrial market report.
Factors such as reshoring and nearshoring of manufacturing operations, expansion of data center capabilities, as well as continuing shifts to e-commerce and omnichannel retail continue to be the main driving forces behind industrial development, yet each faces challenges that could slow the pace of new supply.
Key highlights:
- 341.8M sq. ft. of industrial space is under construction nationally, equal to 1.7% of total stock; 146.6M sq. ft. has been completed so far in 2025.
- In-place rents averaged $8.6/sq. ft., up $.06 from the previous month and 6.2% Y-o-Y.
- Vacancy rose to a decade high of 9%, up by 50 basis points M-o-M and 290 basis points Y-o-Y.
- YTD nationwide sales reached $27.6B, with average prices at $130/sq. ft.
Regional highlights
- Western Markets: Orange County boasts the highest average in-place rent in the nation, at $16.80/sq. ft.
- Midwestern Markets: Minneapolis-St. Paul recorded the highest average sale price in the region, $106.6/sq. ft.
- Southern Markets: Industrial pipelines in Dallas-Fort Worth and Houston doubled Y-o-Y, signaling a new wave of industrial expansion in the Texas Triangle.
- Northeastern Markets: Rents in New Jersey were up 8.3% Y-o-Y to bring the rate to $11.86/sq. ft. and claim the title of the region’s most expensive market.
For more in-depth market insights, including vacancies and asking rates across the top 30 industrial markets, read our report here: https://www.commercialcafe.com/blog/national-industrial-report/
