TAG Industrial Watch: October 8, 2022

For the first time in nearly two years, the supply of new industrial buildings outpaced demand during the third quarter of 2022. Despite net absorption slowing for the fourth consecutive quarter, Q3 demand among the top 50 metro areas stood 50% higher than the quarterly average over the last decade. Meanwhile, new deliveries hit a new quarterly record at 110 million square feet, surpassing demand by just over 17 million square feet. Nonetheless, there is still plenty of good news for industrial landlords, especially owners of smaller properties.

The surplus space represents a small drop in the industrial bucket, with the national vacancy rate maintaining its record low of 4.0%. With supply remaining tight, rents are expected to continue growing at historically high rates, albeit just at a slower pace. In addition, nearly 93% of all the new inventory is concentrated in warehouses larger than 100,000 square feet. Although economic headwinds continue to build, today’s market still offers a great opportunity for industrial landlords.

I N D U S T R I A L   N E W S

U.S. Industrial Absorption Slows In Q3; First Dip In Eight Quarters
Connect CRE – October 5, 2022
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Here’s What The Latest Rate Increase Means For Investors
Globe St. – September 28, 2022
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How Interest Rate Hike No. 5 Affects CRE
Commercial Property Executive – September 22, 2022
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Grant Thornton Survey: CFOs Fret Over Recession,
But Majority Still See Goals Within Reach
Grant Thornton – September 20, 2022
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Cold Storage Feels The Chill Of Inflation, Power Costs
Bisnow – September 19, 2022
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R E G I O N A L   N E W S

Greater Houston Getting $114M Volkswagen Distribution Center
The Real Deal – October 5, 2022
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DFW Industrial Building Continues To Lead The Nation
Connect CRE – October 4, 2022
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Chicago Enacts New Building Code To Speed Decarbonization
Globe St. – October 4, 2022
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$110M Self-Driving Systems Plant Opens In Texas
Commercial Property Executive – September 29, 2022
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Million-Square-Foot Warehouse Breaks Ground In Wilmer
REjournals – September 29, 2022
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