Tampabay / November 5, 2024
U.S. National Market Report | Q3 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 |6.4% : The overall industrial vacancy rate rose by
30 basis points (bps) to 6.4%, driven largely by the delivery of more than
50 msf of vacant speculative deliveries this quarter. However, the 30 bps
increase marked the smallest quarterly climb since the market started to cool off in late 2022. Vacancy levels today are now more consistent with the longterm average of 7%, compared to the historically low levels of the first couple of years coming out of the pandemic, when vacancy was unsustainably tight, hovering around 3%. - Under Construction |309.3 M : The construction pipeline has reached a low not seen since 2018. Given higher interest rates and slowing demand, the U.S. industrial construction pipeline is slowing rapidly. As of the third quarter, only 309.3 msf was under construction—the lowest level since the end of 2018. This will help most existing assets continue to perform well as they will face less competition going forward.
- Vacancy Rate |6.4% : The overall industrial vacancy rate rose by
- Industrial Demand
- Net Absorption |29.4 M : Net absorption continues to moderate in 2024—in line with Cushman & Wakefield forecasts. Quarterly net absorption during the third quarter measured 29.4 million square feet (msf), down from 45.4 msf observed in the prior quarter. Still, with 96 msf of absorption registered year-to-date (YTD), the U.S. is on pace to exceed 100 msf of net absorption for the year.
- Market Pricing
- Asking Rent | $10.08 PSF: Despite cooler demand and rising vacancy rates, the U.S. average asking rental rate increased by 4.3% YOY to $10.08 per square foot (psf), surpassing the $10 psf mark for the first time in history.
- Outlook
- With new supply fading and demand poised to rebound next
year, we expect vacancy to peak at 6.7% midway through 2025 (still
below the historical average) and then trend lower. - • After this year, and with many major occupier consolidations
behind us, we anticipate the engines driving demand for
industrial space—e-commerce, 3PL, consumer spending, housing
recovery and onshoring—to kick into a higher gear. Net absorption
is forecast to increase from around 100 msf in 2024 to over 200 msf
in 2025, and more than 260 msf in 2026. - Meanwhile, rent growth is cooling to more sustainable levels. Annual
rent growth is projected to finish the year at approximately 3% YOY
before trending higher into the mid-single digits over the next
two years, amid strengthening fundamentals and a smaller
construction pipeline.
- With new supply fading and demand poised to rebound next
- Industrial Supply
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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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