Another record-breaking quarter for industrial. And even better news? Demand for new industrial space doesn’t look ready to slow any time soon.
That’s the good news from the U.S. Industrial Marketbeat third-quarter report released last week by Cushman & Wakefield.
According to the report, the U.S. industrial market ended the third quarter of 2021 with demand outpacing supply for the third quarter in a row. The market absorbed 104.7 million square feet in the third quarter, the most space ever absorbed in a single quarter of any year reported by Cushman & Wakefield.
This level of absorption broke the previous record, which, in little surprise, was set in the second quarter of this year.
This brought the year-to-date industrial absorption to 365.9 million square feet. This is already the most absorption recorded in a single year with another entire quarter still to be finished.
This isn’t the first strong industrial report released this quarter, of course. The industrial market has been booming since the start of the COVID-19 pandemic, so cities across the Midwest are setting sector records. But the Cushman & Wakefield report brought especially good news.
Warehouse and distribution space were again the strongest property type, according to Cushman’s report, with 338.9 million square feet of net absorption during the first three quarters of this year.
Even more impressive is how broad demand is for industrial space. Of the 81 industrial markets tracked by Cushman & Wakefield, 55 have seen more than 1 million square feet of positive net absorption this year, while 25 have surpassed 5 million square feet of positive absorption so far this year.
Leasing activity is strong, too. Cushman & Wakefield reported that new leasing activity surpassed 200 million square feet for the fourth consecutive quarter, hitting 207.9 million square feet in the third quarter. This brings the year-to-date total to 667.9 million square feet of industrial leases.
This demand means that the U.S. industrial market is on pace to see its first year of new leasing activity surpassing 700 million square feet. More than 75 percent of the U.S. markets tracked by Cushman & Wakefield — 61 of 81 — posted year-over-year increases in new leasing activity. And 40 U.S. markets have seen more than 5 million square feet of net new leasing activity and 67 more than 1 million square feet year-to-date.
