Fewer Completions, Increased Leasing Help Stabilize Industrial Vacancy

Executive Summary

• Strong new leasing activity and fewer construction completions limited an increase in the overall industrial vacancy rate to just 10 basis points (bps) in Q3, the smallest rise in two years.
• Robust demand from third-party-logistics (3PL) providers brought year-to-date leasing activity to 621.4 million sq. ft., up by 5.2% from this time last year.
• Although net absorption increased for the second consecutive quarter to 53.9 million sq. ft., year-to-date net absorption totaling 122.1 million sq. ft. was 38% lower than last year.
• Average asking rent declined by 0.8% quarter-over-quarter and 2.4% year-over-year to $11.12 per sq. ft.
• Construction starts fell to a post-pandemic low of 36.4 million sq. ft. in Q3.