Industrial rents averaged $6.60 per square foot in July, while new leases cost $1.45 more, according to the latest Yardi Matrix industrial report.

Report Highlights

• Industrial in-place rents clocked in at $6.60 per square foot in in July, up 5.3 percent from the same time last year.
• Industrial vacancy nationwide continues its downward trajectory, averaging 4.4 percent at the end of July, down 20 basis points month-over-month.
• The under-construction pipeline encompassed 695.7 million square feet of industrial space as of July.
• National industrial transaction volume totaled $49.9 billion at the end of July.

National in-place rents for industrial space averaged $6.60 per square foot in July, increasing by 5.3 percent on a year-over-year basis. The cost of a new lease signed in the last year averaged $8.05 per square foot, $1.45 more than the average rental rate. Average rents grew fastest in port markets such as Inland Empire (8.7 percent year-over-year), Boston (8.0 percent) and New Jersey (7.8 percent), largely due to supply-chain imbalances fueled by bottlenecks and increasing inflation.

Construction activity hot in Midwestern markets

The active pipeline continued to grow, although industrial deliveries in the first seven months of 2022 amounted to almost 200 million square feet. Some 695.7 million square feet of industrial space was underway across the nation at the end of July—accounting for 4.0 percent of total stock—and an additional 661.9 million square feet was in planning stages.  

As of July, the markets with the largest pipelines on a percentage of existing stock basis were in Phoenix (45.2 million square feet under construction, 15.6 percent of stock), Indianapolis (25.2 million, 7.8 percent), Dallas (61.4 million, 7.3 percent), and Columbus (17.9 million, 6.5 percent), an emerging data center hub.

Transaction volume nears $50 billion mark

Industrial transactions totaled $49.9 billion year-to-date in July, with average sale prices reaching $130 per square foot, the Yardi Matrix report shows. Transaction activity was concentrated in Los Angeles ($3.3 billion), where investment sales have been bundled near the ports of Los Angeles and Long Beach, Houston ($3.1 billion) and the Inland Empire ($2.9 billion).  

Meanwhile, industrial assets commanded the highest prices per square foot in Southern California markets such as Orange County ($364 per square foot), the Inland Empire ($336) and Los Angeles ($291), as well as Seattle ($245) and the Bay Area ($239).

Read the full Matrix Industrial Report-August 2022

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Average industrial rents clocked in at $6.57 per square foot in June, up 4.9 percent from the same time in 2021, the latest Yardi Matrix industrial report shows.

Report Highlights

• Industrial in-place rents averaged $6.57 per square foot in June, up 4.9 percent from the same time last year.

• Industrial vacancy nationwide averaged 4.6 percent in June, decreasing by 10 basis points from the previous month.
• National industrial transaction volume surpassed $39.5 billion in the first half of the year.
• Neary 667.5 million square feet of industrial space was under construction as of June across the nation.

National industrial vacancy was 4.6 percent in June, a 10-basis-point decrease from the prior month. Vacancy was lowest in California, particularly in the Inland Empire (0.6 percent) and Los Angeles (1.9 percent). Meanwhile, vacancy stood below the 3.0 percent-mark in logistic hubs such as Columbus (1.4 percent), Nashville (2.1 percent) and Indianapolis (2.4 percent) and port markets including New Jersey (2.8 percent).

Coastal markets dominate rent growth

National in-place rents for industrial space averaged $6.57 per square foot in June, increasing by 4.9 percent on a year-over-year basis and four cents when compared to May. Average rents grew fastest in coastal markets, with the Inland Empire (7.4 percent year-over-year), Los Angeles (6.8 percent) and Orange County (6.5 percent) leading the way in this aspect.

The cost of a new lease in the last 12 months continued to grow, reaching an average of $7.65 per square foot, 88 cents more than the average rental rate. Southern California markets posted the largest spreads between average rental rates and new leases, largely due to their limited supply of developable land.

Pipeline, average sale prices on the rise

Some 667.5 million square feet of industrial space was underway across the nation at the end of June—accounting for 3.8 percent of total stock—while 684.6 million square feet are in planning stages. Industrial deliveries in the first half of 2022 amounted to 159.6 million square feet, with the bulk concentrated in Dallas-Fort Worth (15.9 million square feet), Indianapolis (7.9 million) and Phoenix (7.7 million square feet).

Industrial transactions totaled $39.6 billion year-to-date in June. Average sale prices reached $129 per square foot in the first six months of the year, representing a 12.4 percent uptick over the first quarter and a 31.3 percent increase when compared to June 2021. Transaction activity was concentrated in Houston (2.8 billion year-to-date in June), Chicago (2.3 billion), Los Angeles (2.2 billion), Phoenix (2 billion) and New Jersey (1.8 billion). Meanwhile, industrial assets traded at the highest price in Southern California markets such as Orange County ($350 per square foot), the Inland Empire ($299) and Los Angeles ($282).

Read the full Matrix Industrial Report-July 2022

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The second quarter of 2022 is expected to be the seventh consecutive quarter to see an increase in the average sale price, according to the latest Yardi Matrix industrial report.

Report Highlights

• Industrial in-place rents averaged $6.53 per square foot in May, up 4.7 percent from the same time last year.

• Industrial vacancy nationwide clocked in at 4.7 percent in May, a 30-basis-point decrease from the previous month.
• National industrial transaction volume totaled $31.2 billion year-to-date in May.
• Some 656 million square feet of industrial space was under construction across the nation at the end of May.

National industrial vacancy stood at 4.7 percent as of May, down 30 basis points from the prior month. Heightened demand, combined with the scarcity of developable land drove vacancy rates in the Inland Empire, Los Angeles, Central Valley, New Jersey, Miami and Columbus well below the 3 percent mark.

Some 656.5 million square feet of industrial space was underway across the nation at the end of May, accounting for 3.8 percent of total stock. When taking into account planned projects, the rate is pushed to 7.8 percent of existing stock. With 58.7 million square feet underway representing 7.0 percent of total stock, Dallas leads the way in terms of construction activity.

Industrial rents on the rise

National in-place rents for industrial space averaged $6.53 per square foot in May, increasing by 4.7 percent on a year-over-year basis and five cents when compared to April. The largest increases over the last 12 months were recorded in Los Angeles (7.2 percent), Inland Empire (6.8 percent), Boston (6.6 percent) and Central Valley (6.1 percent).

The cost of a new lease in the last 12 months continued to be on the upswing, averaging $7.70 per square foot, $1.17 higher than the average rental rate. Port markets from Southern California continue to be the most sought-after, with Los Angeles ($3.96 difference), the Inland Empire ($3.80) and Orange County ($3.74) leading the way in this aspect.

Transactions Still Hot Despite Economic Uncertainty

Industrial sales totaled $31.2 billion in the first five months of 2022, with assets trading at an average of $132 per square foot. Transaction activity was highest in Houston ($2.6 billion), Chicago ($1.9 billion), Los Angeles ($1.8 billion) and Phoenix ($1.7 billion), while markets such as Cincinnati, Memphis and Portland ranked last on the list. According to Yardi Matrix, inflation and rising interest rates will alter the sales market in multiple ways going forward, but it is unlikely that pricing will slow down any time soon.

Read the full Matrix Industrial Report-June 2022

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More than 640 million square feet of industrial space was underway across the nation at the end of April, while another 650 million square feet is in the planning stages, according to the latest Yardi Matrix industrial report.

Report Highlights

• Industrial rents averaged $6.47 per square foot in April, up 4.4 percent from the same period last year.
• Average industrial vacancy clocked in at 5.0 percent, down 120 basis points from January 2021.
• Investment sales amounted to $19.0 billion at the end of April, likely to surpass last year’s record numbers.
• The under-construction industrial pipeline included 640.1 million square feet at the end of April.

Industrial vacancy nationwide was down by 120 basis points compared to January 2021, reaching 5.0 percent in April. While California markets and Midwestern logistic hubs continue to post vacancies well below the national average, coastal markets including New Jersey (2.8 percent) and Miami (3.0 percent) outperformed national rates.

National in-place rents for industrial space averaged $6.47 per square foot in April, increasing by 440 basis points on a year-over-year basis but remaining unchanged from the previous month. California markets continue to post the highest asking rates, closely followed by post markets such as Seattle ($9.03 per square foot), Miami ($9.01 per square foot) and Boston ($8.30 per square foot).

Meanwhile, a new signed lease averaged $7.48 per square foot in the last 12 months—a full dollar higher than the overall rental rate and 13 cents more than it was in March. Although average lease rates signed over the last year were highest in California—led by Orange County ($15.55 per square foot) and Los Angeles ($13.94 per square foot)—St. Louis ranked at the top of the list with a 7.4 percent increase in the average rate over the last 12 months.

Development Driven by Strong Demand

Some 640.1 million square feet of industrial space was under construction across the nation at the end of April, accounting for 3.7 percent of total stock. What’s more, Yardi Matrix forecasts approximately 450 million square feet of space to come online annually over the next five years, with demand likely to outpaces supply in the close future.

As of April, the markets with the largest pipelines on a percentage of stock basis were Phoenix (41.5 million sq ft under construction, 14.6 percent of stock), Indianapolis (26.2 million, 8.3 percent) and

Dallas (52.7 million, 6.3 percent). Industrial sales in the first four months of the year totaled close to $19 billion, with industrial assets trading at an average $134.10 per square foot.

Read the full Matrix Industrial Report-May 2022

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Three Southern California markets rank at the top of the charts in terms of rent and occupancy, according to the latest Yardi Matrix industrial report.

Report Highlights

• Industrial in-place rents averaged $6.47 per square foot in March, up 4.4 percent from the same time last year.
• Industrial vacancy nationwide averaged 5.0 percent in March, decreasing by 20 basis points from the previous month.
• National industrial transaction volume totaled $14.8 billion in the first quarter of 2022, slightly below the $18.6 billion recorded in the first quarter of 2021.
• Neary 60 million square feet of industrial space was delivered in the first three months of 2022.

National in-place rents for industrial space averaged $6.47 per square foot in March, increasing by 4.4 percent on a year-over-year basis and two cents when compared to February. Average rents surpassed double-digit values in Orange County ($11.80 per square foot), the Bay Area ($10.99) and Los Angeles ($10.45), driven by the scarce availability of developable land.

The cost of a new lease in the last 12 months continued its upward trajectory, reaching an average of $7.35 per square foot, 136 basis points higher than the average rental rate. While port markets posted the largest spreads between average rental rates and new leases, Midwestern markets such as Kansas City or Denver had a lower average rate for new leases than the market average.

Vacancies continue to tighten in California

National industrial vacancy stood at 5.0 percent in March, a 20-basis-point decrease from the prior month. Vacancy was lowest across most California markets, with the Inland Empire (0.7 percent), Los Angeles (2.1 percent), Central Valley (2.7 percent) and Orange County (3.4 percent) leading the way in this sense. Meanwhile, markets with an outdated industrial inventory such as Boston (10 percent) or Cincinnati (9.5 percent) posted the highest vacancies.

Pipeline, average sale prices on the rise

Some 621.7 million square feet of industrial space was underway across the nation at the end of March—accounting for 3.6 percent of total stock—while 653.2 million square feet are in planning stages. Industrial deliveries in the first quarter of 2022 amounted to more than 60 million square feet, with the bulk concentrated in Dallas-Fort Worth (4.5 million square feet) and Indianapolis (3.7 million).

Meanwhile, industrial transactions totaled $14.8 billion year-to-date in March. The amount was slightly below the volume recorded over the same period last year, not counting a lag in collecting data. Average sale prices reached $125 per square foot in the first three months of the year, representing a 34 percent uptick when compared to the first quarter of 2021. Of the 120 markets covered by CommercialEdge, 41 recorded an average sale price increase exceeding 50 percent between 2019 and 2021.

Read the full Yardi Matrix Industrial Report-April 2022

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The industrial sector’s appeal continued, with vacancy once again trending downward.

Report Highlights

• Industrial rents averaged in at $6.45 per square foot in February, up 4.4 percent from the same period in 2021.
• Average industrial vacancy clocked in at 5.2 percent, down by 30 basis points from January.
• Investment sales totaled $9.1 billion at the end of February.
• The active industrial pipeline included 592.5 million square feet at the end of February.

National industrial vacancy was down by 30 basis points compared to January, reaching 5.2 percent in February. While logistics hubs in Southern California and the Midwest continued to be the most-sought after, with vacancies well below the national average, markets such as Cincinnati and Houston had vacancy rates in the double digits.

National in-place rents for industrial space averaged $6.45 per square foot in February, increasing by 440 basis points on a year-over-year basis. Once again, SoCal markets led the way in industrial rent growth, with Orange County recording the highest rent growth over the last 12 months (7.0 percent), closely followed by Los Angeles (6.7 percent). Meanwhile, a new signed lease averaged $7.35 per square foot in the last 12 months, 90 cents higher than the overall rental rate.

Some 592.5 million square feet of industrial space was under construction across the nation at the end of February, accounting for 3.5 percent of total stock. Amazon-occupied industrial facilities represented a safe bet for investors: The 16 largest buildings delivered last year-scattered across small and large markets alike-were either leased or owned by Amazon.

Average sale prices on the rise

Industrial sales in the first two months of the year totaled close to $9.1 billion, pointing to heightened investor appetite as 2022 continues to unfold. Industrial assets traded at an average $125 per square foot, with sale prices increasing 50 percent from the third quarter of 2020 until the first quarter of 2022.

Philadelphia led the way in terms of transaction volume: $725 million worth of assets changed hands in the metro year-to-date in February, with the largest asset sold being a 3.8 million-square-foot facility fully occupied by Amazon.

Read the full Matrix Industrial Report-March 2022

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The U.S. industrial sector is driven by strong shipping volumes in the nation’s ports.

Report Highlights

• Average industrial rents clocked in at $6.46 per square foot in January, up 4 percent from the same time in 2021.
• Industrial vacancy averaged 5.5 percent, decreasing by 20 basis points from December 2021.
• National industrial transaction volume topped $3.6 billion at the end of January.
• Average sale prices reached $135 per square foot in January.

National industrial vacancy was down by 20 basis points compared to December 2021, reaching 5.5 percent in January. Southern California continued to post tight industrial vacancy rates, with Inland Empire (0.9 percent) leading the way in this sense. Vacancy rates were also low in Midwestern logistic hubs including Columbus (1.3 percent) and Indianapolis (2.6 percent).

National rents for industrial space averaged $6.46 per square foot in January, increasing by 4 percent on a year-over-year basis. Meanwhile, a new lease signed in the last 12 months averaged $7.32 per square foot, or 13.3 percent more than the national average rate. The largest differences between new and existing leases occurred in Orange County ($3.34 more per foot), followed by the Inland Empire ($2.67) and Boston ($2.24).

Development concentrated within logistics hubs

Some 587.8 million square feet of industrial space was under construction across the nation at the end of January, accounting for 3.5 percent of total stock. Including planned projects, the pipeline amounts to 7 percent of total inventory. Construction activity soared in popular logistics hubs such as Dallas (38.8 million square feet underway), Phoenix (35 million square feet) and Indianapolis (29 million square feet).

Transactions off to a good start

Investment transactions amounted to some $3.6 billion in the first month of 2022, not counting a lag in collecting sales data. According to Yardi Matrix data, 400 properties changed hands at an average sale price of $135 per square foot. This represents a 13 percent increase from the fourth quarter last year, when industrial properties traded at an average $119 per square foot.

Transaction activity was concentrated in New Jersey, where $375 million worth of industrial assets traded in January alone at an average of $237 per square foot—the third-largest average sale price in the nation.

Read the full Matrix Industrial Report-February 2022

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Development and investment wrapped up a very strong 2021, as the sector was bolstered by strong demand.

Report Highlights

• Industrial rents averaged $6.40 per square foot in December, a 1.8 percent increase from the same time last year.
• Industrial vacancy remained unchanged from November 2021, averaging 5.7 percent.
• National industrial transaction volume recorded a new high, totaling $71 billion at the end of December 2021.
• Nearly 322 million square feet of industrial space were delivered throughout 2021, significantly more than 2020’s total of $48.3 billion.

National industrial vacancy stood at 5.7 percent in December 2021, unaltered from the month prior. The Inland Empire had the lowest vacancy rate across the nation (0.9 percent), alongside other Southern California markets such as Los Angeles (2.8 percent) and Orange County (3.8 percent), port markets such as New Jersey (3.8 percent) and logistics hubs in the Midwest including Columbus (2.5 percent).

Asking industrial rents soar in Southern California

National rents for industrial space averaged $6.40 per square foot in December, increasing by 5.1 percent on a year-over-year basis. Rents soared in Southern California, particularly in the Inland Empire (6.3 percent growth), Los Angeles (6.2 percent) and Orange County (5.1 percent). The cost of a new lease in the last 12 months averaged $7.28 per square foot, 140 basis points higher than the average rental rate. The Inland Empire once again led the way in this sense: a new lease was 38 percent costlier than the $2.48 per square foot market average.

Record-breaking momentums

Industrial deliveries at the end of 2021 equaled to roughly 322 million square feet. However, the new stock volume is expected to surpass 2020’s total of 324.1 million thanks to a lag in collecting supply data, leading to a new record for industrial development. With 10.3 million square feet delivered in 2021 and 32.6 million square feet under construction—accounting for 11.8 percent of total stock—Phoenix emerged as one of the nation’s most promising industrial markets going forward.

Similarly, industrial transactions recorded a new high, totaling $71 billion at the end of 2021. Transaction volume was well over 2020’s figure of $48.3 billion. Meanwhile, average sale prices continued their upward trajectory, reaching $129 per square foot in December, 29 percent higher than in 2020. More than two-thirds of markets covered by YardiMatrix saw an increase in total volume compared to 2020, with Los Angeles ($2.9 billion more than 2020), the Inland Empire ($2.0 billion), Chicago ($1.8 billion) and Phoenix ($1.6 billion) leading the way in this sense.

Read the full Matrix Industrial Report-January 2022

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■ The pandemic has dominated every aspect of the economy over the last 21 months, upending many of the trends that had been prevalent in the previous decade. One of the biggest shifts is consumer demand moving from services to goods, with a greater share of goods now purchased online. The prominence of e-commerce—accounting for 16% of core retail sales in the third quarter—has been a main factor in industrial becoming commercial real estate’s darling asset class. Although growth in ecommerce is starting to slow, it’s still well above pre-pandemic levels.

■ Amazon’s share of e-commerce is estimated to range from 40% to 50%, and its footprint is felt in the industrial market, where it occupies an ever-increasing amount of space. Yardi Matrix data shows 12 properties larger than 3 million square feet delivering this year, all of them either leased or owned by Amazon. Massive distribution centers have been completed in a variety of markets, from major metros like Chicago and Houston to tertiary markets like Little Rock and Colorado Springs.

■ Although it is the main player, Amazon is not the only company driving the e-commerce boom. Bigbox retailers have long been trying to compete with the online behemoth for e-commerce sales, and the pandemic has increased the importance of doing so. Both Target’s and Walmart’s third quarter earnings noted solid but slowing growth of e-commerce sales, following the national trend, but also highlighted the importance of physical stores in the future of online sales. Instead of occupying massive distribution centers, these companies use their stores to fulfill orders. Target reported that while online purchases accounted for 17.6% of all sales in the third quarter, stores fulfilled 96.7% of orders. Omnichannel retail—providing customers with a seamless, consistent experience between online and brick-and-mortar—will become more prevalent in the future. Amazon is prepared for these coming changes after purchasing Whole Foods in part for the chain’s site selection.

■ E-commerce sales have grown steadily since the Census Bureau started tracking them in 2010. However, growth has started to slow and become more volatile since the third quarter of 2020. E-commerce’s share of core retail sales peaked at 19.4% in the second quarter of 2020, but fell to 16% by the third quarter of 2021. Despite this loss of share, though, online sales are still well above pre-pandemic levels. We believe that some of the shift to e-commerce over the last two years was structural rather than temporary, and e-commerce will continue to fuel the industrial market.

Read the full Matrix Industrial Report-December 2021

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Report Highlights:

• Rent growth continues its upward trajectory at 3.9 percent year-over-year
• Development activity picks up, with 522.5 million square feet under construction
• With $51.2 billion in sales, transaction volume surpasses last year’s

Yardi Matrix’s November industrial report shows the sector still has room to grow, with skyrocketing demand pushing industrial rents ever upward as development—itself at record highs—struggles to keep up.

Lease rates, premiums continue to rise

Industrial rents averaged $6.37 per square foot in October, a gain of 3.9 percent over the year. Premiums paid for new leases in the past 12 months also shot up, $0.82 per square foot above the national average, showcasing the significant impacts of swelling demand for modern space.

Although rent growth was uneven, most coastal markets exhibited strong increases. The Inland Empire had the swiftest rent gains, up 6.6 percent over the year to $6.45 per square foot in October. Los Angeles and New Jersey also reported notable growth, with increases of 5.7 percent each during the same period. New Jersey’s industrial space also commanded the highest premiums across the country, averaging $2.54 per square foot.

Vacancy increased by 20 basis points over the month to 5.9 percent in September, though this figure masks tightening vacancies in many markets—even those far from the increasing demands placed on the sector by exploding port traffic. While the Inland Empire had the tightest vacancy rate nationwide of 1.0 percent, a 10-basis-point drop over the month, several markets far from ports also reported a significant lack of availability, including Columbus (1.9 percent vacancy) and Nashville (2.8 percent).

Development picks up the pace

At the end of October, industrial projects totaling 522.5 million square feet were underway, or 3.2 percent of total inventory. Deliveries through the end of October this year already exceeded 250 million square feet, though this figure is unlikely to overshadow last year’s record-high of 319.2 million square feet delivered.

The Dallas-Fort Worth market had the highest level of construction activity in October, with 35.3 million square feet underway. However, Phoenix led the nation in terms taking market size into consideration: The city’s nearly 30 million square feet underway accounts for a staggering 11 percent of existing inventory.

Transaction volume exceeds last year

Industrial transactions totaling $51.2 billion closed year-to-date through October, already 8.7 percent higher than last year’s volume of $47.1 billion. Pricing continued to climb: Sales averaged $110 per square foot, 25 percent higher than in 2020.

Los Angeles led the country in total investment activity, with $3.8 billion in deals closed through October. Given the rapid increase in inbound and outbound port activity, pricing jumped to $221 per square foot, exceeded only by Orange County ($294 per square foot) and the Bay Area ($223 per square foot).

Read the full Matrix Industrial Report-November 2021

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