The industrial market has continued to shine bright despite economic hurdles, clocking in at $44.4 billion in deals, far surpassing that of any other asset class, based on a recent report by CommercialEdge.
Rent growth last month also remained strong as new leases continued to fetch higher prices. Across major markets, rents rose, from 3.7% in Cincinnati to 15.2% in coastal spots like the Inland Empire.
National industrial rents hit $7.55 per square foot, climbing 7.6% yearly. New leases averaged $10.28 per square foot, with some areas seeing new lease rates as high as $18.49 per square foot.
While national industrial vacancies rose to 4.6%, a massive 512.5 million square feet was under construction.
Nationwide transactions dipped to $44.4 billion this year, but average sale prices rose by 6.8% to $131 per square foot. It was also reported that Chicago led the region in sales, hitting $1.63 billion as of last month.
As for the rest of the U.S., Dallas-Fort Worth had strong growth but saw rents slow due to an increase in supply, according to the report. In the Northeast, New Jersey’s industrial scene slowed, hinting at land shortages. Warehouse jobs declined for a year, possibly due to less hiring by big players like Amazon and a push for automation.
Substantial investments across all regions continue to exemplify the resilience of the industrial market, poised to maintain its strength as we approach a new year. As in any market, there are tradeoffs to consider: rent growth has remained strong, accompanied by a surge in construction; transaction volumes experienced a dip, but prices have seen an upward trajectory. What remains certain is the industry’s ongoing evolution, and despite challenges, anticipations are high for the growth that lies ahead in 2024.
