New lease premiums in port markets continue to rise due to persistent demand and limited supply

CommercialEdge just released its October industrial report analyzing the U.S. industrial market’s performance through September 2022. 

Industrial tenants continue to pay increasingly higher rents for dwindling amounts of available space, with the national average rent for in-place leases at $6.88 per square foot, up 5.8% year-over-year. 

As Peter Kolaczynski, Operations Senior Manager with CommercialEdge frames it: “Especially in Southern California and around the port in New Jersey, very low vacancy, a limited new supply pipeline and steady demand are justifying the premiums new leases are garnering. Less so in the Midwest where supply pipelines represent a greater percentage of existing inventory” 

Key findings from our report:   

  • High demand continues to push prices up in the industrial sector, with September in-place rents nearly 6% over year-ago figures  

  • National vacancy rate rests at 4.1% for the second consecutive month with occupier demand unlikely to weaken 

  • With shrinking amounts of available industrial space nationally, 703 million square feet of new supply was under construction at the end of September 

  • Although sale prices cooled in some markets during Q3, industrial assets are still trading for 54% more than in 2020  

  • Phoenix industrial footprint headed for 32% increase due to unrelenting overflow from Southern California  

  • Despite rivaling So-Cal vacancies, Indianapolis and Columbus keep industrial rent growth at 3% with sustained deliveries 

  • Under construction industrial projects reach $62 million in Dallas-Fort Worth as market leverages lack of geographic limitations to satisfy demand 

For more insights and market-specific data, check out our full report here: https://www.commercialedge.com/blog/national-industrial-report/   

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Hyatt builds portfolio with Dream Hotel acquisition

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