U.S. industrial rents climb 6% as vacancy inches up

Across the U.S., rents for industrial assets rose nearly 6 percent year over year to reach $8.73 per square foot in October.

None of the top markets saw rent fall over the past year. But the sector’s rental growth comes as the vacancy rate also increased, by 240 basis points, over the past 12 months to 9.6 percent amid increased inventory, according to Yardi Matrix’s November industrial report.

Much of the sector’s rental growth can be attributed to properties that are less than 100,000 square, according to the commercial real estate data firm. The report attributes the increase in demand for such properties to changing consumer expectations and zoning difficulties for larger projects. The average sale price for the smaller assets climbed near 11 percent compared to the same period last year.

The vacancy rate for industrial properties around the U.S. stems from a supply boom, according to the report, which added that this will continue for the next several quarters as well. Nearly 2 percent of the country’s industrial stock is under construction, totaling about 353 million square feet.

The market that recorded the strongest year-over-year rent growth was Miami, where the average rent in October was $12.91 per square foot, a roughly 9 percent spike. The vacancy rate in that market was just over 11 percent.

In Miami-Dade County, industrial sales averaged about $276 per square foot in the third quarter — the highest in Florida, according to commercial real estate firm Avison Young. The county also had the highest sales volume, of $687 million, in the Sunshine State in the third quarter.

Meanwhile, the Detroit industrial market posted the weakest rental growth in the country, of 2.4 percent year over year. The average rent in October in that city was $7.11 per square foot, and the vacancy rate was 6.2 percent.

Denver and Columbus had the greatest vacancy rates in the country, with more than 13 percent of those markets’ industrial assets sitting empty in October. On the flip side were Kansas City and Bridgeport, Connecticut, which had the country’s lowest vacancy rates, of 4.9 percent and 5.7 percent, respectively.

In the third quarter, commercial real estate investors poured some $24 billion into industrial assets around the country, the second-most among the sectors. However, that was slightly down from the $24.5 billion invested in the third quarter of 2024, according to a report from CBRE.