Tampabay / July 15, 2024
U.S. National Market Report | Q2 2024
A resilient economy and consumer spending are pushing the industrial market forward. Despite its recent deceleration, the U.S. industrial market continued to perform positively. In the second quarter, net demand climbed, asking rental rate growth persisted, and the rate at which vacant sublet space came online slowed for the second straight quarter.
Check out the full report below presented by Cushman and Wakefield.
Highlights:
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- Industrial Supply
- Vacancy Rate |6.1% : Although the national vacancy rate edged higher to 6.1%, the 40-basis-point (bp) increase was the lowest quarterly rise since the first quarter of 2023. This is the highest the vacancy rate has been in almost nine years, but it still stands well below the 10-year, pre-pandemic (2010-2019) average of 7%. New vacant supply delivering to the market remains the main driver of rising vacancy in many markets, while the rate at which sublease space has come online has slowed in the last two quarters.
- Under Construction |343.3 M : The construction pipeline continues to shrink. With 343 msf of industrial space under construction, the pipeline ended the second quarter down 14% quarter-over-quarter (QOQ) and under half of the peak of 718 msf in the third quarter of
2022. The pipeline will dissipate further in 2025, which will help tighten vacancy rates in the second half of next year as
this wave of supply starts to become absorbed.
- Industrial Supply
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- Industrial Demand
- Net Absorption |46.3 M : The U.S. industrial market posted 46.3 msf of net absorption in the second quarter, more than doubling the total registered in the previous quarter. Almost all of the overall absorption recorded nationwide continued to be tied to the delivery of new industrial product with tenants in place. Absorption improved QOQ in 36 different markets. Six markets surpassed 3 msf of quarterly absorption, led by Dallas/Ft. Worth (13.8 msf), Phoenix (7.4 msf) and Houston (4.3 msf).
- Industrial Demand
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- Market Pricing
- Asking Rent | $9.97 PSF: Asking rents once again edged higher to $9.97 per square foot (psf), up just 3.7% year-over-year (YOY), the lowest growth rate since 2020.
- Market Pricing
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- Outlook
- Amid the rapidly thinning pipeline and continued positive net absorption, the industrial market is poised to
tighten in the second half of next year. The tailwinds of e-commerce growth, onshoring and nearshoring, and a resilient consumer all set the stage for fundamentals to trend positively going forward, albeit at a
pace below 2021 and 2022 highs. - Expect vacancy to continue to edge higher into the first half of next year, albeit at less substantial clips. We project vacancy to top out at 6.7% in the first quarter of 2025 and will begin tightening in the second
half of 2025. Annual net absorption should surpass 100 msf by the close of 2024, before doubling in 2025. - Asking rent growth will likely moderate further and end 2024 at 3.0% before decelerating to 2.2% of growth in 2025. Expect rent growth to accelerate back to the mid-single digits in 2026 amid tightening
vacancy rates. - New supply will likely reach 380 msf by the close of this year but will thin out afterward. As a result,
deliveries will fall to 160 msf in 2025 before climbing again.
- Amid the rapidly thinning pipeline and continued positive net absorption, the industrial market is poised to
- Outlook
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View Cushman and Wakefield’s Historical Reports
Have questions about the report or looking for more information about the industrial market in Tampa Bay? Please reach out to the team!
John Jackson, SIOR, CCIM. | Managing Director
+1 813 424 3202 | John.Jackson@cushwake.com
JT Faircloth | Director
+1 813 833 3242 | Jt.Faircloth@cushwake.com
Casey Perry | Senior Associate
+1 813 233 6464 | Casey.G.Perry@cushwake.com
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