Newmark recently released its third quarter national industrial market report. And the trends it highlighted showcase just how strong industrial real estate is today.
One of the bigger numbers from the report? Net absorption reached an all-time high of 133.8 million square feet nationally in the third quarter. Another? The nation’s industrial vacancy rate fell to a record-low 4.6 percent.
In the Midwest, Chicago was the star. Newmark said that the Chicago market saw more than 9 million square feet in absorption during the third quarter.
This low vacancy rate, though, is causing problems for end users. Newmark says that with available industrial space so limited, tenants with immediate occupancy needs are struggling to find space in many of the country’s busier markets.
Developers are responding. Newmark reported that 431.7 million square feet of industrial space was under construction in the third quarter. This figure is another record.
With demand so high, it’s not surprising that industrial asking rents are on the rise, too. According to Newmark, average asking rents increased by nearly 4 percent in the third quarter when compared to the previous quarter to hit $8.62 a square foot. That’s a jump of 12.4 percent compared to a year earlier.
And the future looks bright. Newmark reported that retail spending in the third quarter was up 15.1 percent when compared to the same quarter in 2020. Newmark predicts that this figure still has room to grow as consumers are ready to spend the dollars they saved during the pandemic. This, of course, would result in even higher demand among companies for new industrial space.