2022 Q1 U.S. industrial market overview

13.08b sf

Inventory

The U.S. industrial market has added a staggering 1.3 billion square feet over the last four years, amounting to roughly a quarter of the current U.S. office market. New development is most predominant in gateway markets without land constraints, with growth in deliveries averaging 2.4% over the last 12 months alone.

0.8%

Net absorption

Demand continues to be as strong as ever for prime-grade, efficient distribution & logistics real estate. Leasing activity as a percentage of inventory in the first quarter, when annualized and accounting for seasonality in leasing, should be on par if not above record 2021 levels.

7.7%

Average NNN asking rents

Asking rents continue to escalate, with concessions in many tight markets becoming limited and taking rates spiking year-over-year. In addition, compounded annual growth rates underpin a market in which tenants are still paying up for location optimization.

4.7%

Under construction

Construction currently underway represents 4.7% of total U.S. industrial inventory, easily doubling 20-year long-term averages. Speculative development has picked up over the last 5-6 years in many major markets, but much of that space is getting leased during the construction cycle or shortly after, continuing to push vacancy down.

4.4% total

Vacancy

Overall vacancy has been steadily declining since 2010, and despite a brief COVID “blip,” is back to historical lows. In aggregate, U.S. vacancy is now 170 basis points lower than pandemic levels. Tight market fundamentals are driving development to new highs and fueling double-digit rent growth in some markets.

42.3%

Investment sales

When compared to other asset types, multifamily & industrial proven to be the most attractive from an investment volume standpoint. Price-per-square-foot averages for industrial investments are up 42.3% over the last three years, and buyer demand remains strong and on-market opportunities limited, keeping competition high.

Local 2022 Q1 industrial market reports

Get industrial market trends, data and insights for your commercial real estate market.

Additional thought capital from Avison Young

Is real estate an inflation hedge?

Although the global economy has experienced a robust rebound in a recovery era, fears remain around a period of higher inflation and interest rates. Does real estate possess inflation-hedging properties?

Our experts explore the economic outlook and whether real estate really does possess inflation-hedging properties.

LEARN MORE

Hero Image

Retail Vitality Index

Our team analyzes how in-person and online shopping habits have evolved across North America using cell phone mobility data.

VIEW RETAIL VITALITY INDEX

Hero Image

U.S. employment overview: tracking trends in real-time

The most recent U.S. jobs report shows continuing growth, as employers added more than 400,000 jobs for the fourth straight month amidst signs that worker turnover is beginning to decline. Meanwhile, concerns with inflation continue as economists watch Federal Reserve actions closely, following the first interest rate increase since 2018.

Explore here

Hero Image