US industrial market hit records across several metrics in Q3

Vacancy at all-time low; rent, absorption, development square footage set highs

National /
Oct.October 09, 2021 02:00 PM

Vacancy fell to an all-time low while average rents have reached an all-time high (iStock)

It was a record third quarter for the U.S. industrial market by just about every key metric.

Vacancy fell to an all-time low of 4.1 percent on the back of a record 140 million square feet of net absorption, according to the Business Journals. Average rents reached an all-time high of $7.18 per square foot.

Developers are also setting records: The 521.4 million square feet of space under construction in the quarter was the most ever. Around 340 million square feet is slated for delivery this year.

The industrial market has been on fire for a few years and especially during the pandemic, thanks in large part to demand for logistics space to cater to the growing e-commerce sector.

Some metrics in the first three quarters of 2021, including net absorption, have already surpassed previous yearly totals or are close to doing so.

The 366 million square feet of net absorption so far this year has blown past 2018’s total of 306 million, while 667 million square feet of leasing volume nears last year’s total of 699 million.

Rent for new construction industrial properties — designed with high ceilings and often dozens of loading bays for modern needs — in some prime markets have grown by 24.3 percent since 2019.

Vacancy in some of the tightest markets is now well below 2 percent. Los Angeles’ vacancy rate fell from 1.7 percent in Q2 down to 1.4 percent in Q3.

[The Business Journals] — Dennis Lynch





    Related Articles

    arrow_forward_ios
    CRE held up through the pandemic far better than most expected (iStock)
    How commercial real estate survived the pandemic
    How commercial real estate survived the pandemic
    Renderings of the project (RDM Group)
    RDM Group plotting $440M industrial play in Orange County
    RDM Group plotting $440M industrial play in Orange County
    KKR founders Henry Kravis, George Roberts step down as co-CEOs
    KKR founders Henry Kravis, George Roberts step down as co-CEOs
    KKR founders Henry Kravis, George Roberts step down as co-CEOs
    NorthPoint Development plans to acquire this 92-acre property in Yaphank (Google Maps)
    NorthPoint to buy 92 acres of Suffolk County industrial space
    NorthPoint to buy 92 acres of Suffolk County industrial space
    Sam Zell (left) and Barry Sternlicht (Photos by Studio Scrivo and Emily Assiran)
    Battle of Monmouth: Zell and Sternlicht’s $2B struggle over warehouse REIT
    Battle of Monmouth: Zell and Sternlicht’s $2B struggle over warehouse REIT
    Abandoned Salem factory being repurposed
    Abandoned Salem factory being repurposed
    Abandoned Salem factory being repurposed
    KKR closes $4.3B commercial real estate fund
    KKR closes $4.3B commercial real estate fund
    KKR closes $4.3B commercial real estate fund
    Singaporean REIT acquires US industrial portfolios for $3B
    Singaporean REIT acquires US industrial portfolios for $3B
    Singaporean REIT acquires US industrial portfolios for $3B
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...