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Southern cities are dominating industrial construction in the U.S.
Dallas-Fort Worth has some 28 million square feet of industrial space underway, the highest amount in the country as of August, according to data from Yardi. Houston was second, with just under 17 million square feet of space being built.
Rounding out the top five metros for industrial construction were Phoenix (16.14 million square feet), Memphis (12.42 million square feet) and Atlanta (10.48 million square feet).
Of those five cities, Atlanta recorded the highest vacancy rate in August, of 12.5 percent. Phoenix’s was the lowest, at 7.4 percent.
Meanwhile, Orange County, California, posted the lowest amount of industrial space under construction, of just 0.76 million square feet. However, the region had the highest average rent, of $17.02 per square foot.
Two other California metros — Los Angeles and the Bay Area — notched the second and third-highest average rents, of $15.42 per square foot and $13.87 per square foot, and quite a bit more industrial construction underway than Orange County. Los Angeles has 4.87 million square feet being built, and the Bay Area, 3.22 million square feet.
As for Southern California’s Inland Empire, the most active industrial hub in the Western U.S., the vacancy rate clocked in at 7.7 percent in August. The market has been in a correction phase after a pandemic-era surge in demand and record-breaking construction activity.
Nationwide, the vacancy rate edged down by 30 basis points in August compared to the month before to 8.7 percent. However, the vacancy rate is still 200 basis points higher than it was during August 2024, despite trade and economic uncertainties, according to Yardi.
Development is also up across the board. There is more than 338 million square feet of industrial space under construction in the U.S., and Yardi anticipates the nation’s industrial stock to grow by 1.6 percent as a result. Year to date through August, more than 205 million square feet have already been completed.