2022 Q1 U.S. industrial market overview

13.08b sf


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.


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.


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.


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


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.


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.

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