TAG Industrial Watch: December 14, 2024

With interest rates still high and industrial demand falling to the lowest level since 2010, developers are responding by pulling back on new projects but the mismatch between supply and demand continues to widen. Year-to-date, net deliveries have fallen -33.9% from 2023 totals to 352.4 million square feet across the top 50 metros (CoStar, minimum 10,000 square feet, Classes A, B, & C). Though, with net absorption slipping -47.8% to 100.1 million square feet, there are 3.5 square feet of new supply for each square foot of demand. This is a noticeable increase from the 2.8 ratio between supply and demand that occurred in 2023. Given that 327.5 million square feet are still under construction and industrial demand could be heading into negative territory, developers are likely overestimating demand going into the new year. Although the pipeline is less than half the record level set in 2022, 71.5% is still concentrated in big-box warehouses. As big-box vacancies move past the key threshold of 10%, small industrial properties, whose vacancy rate sits at just 4.2%, will likely capture even more attention from large institutional investors. If there is a movement out of big-box investments, small industrial landlords will be in a strong position to receive top dollar for their properties.

I N D U S T R I A L   N E W S

Industrial Pipeline Keeps Slowing
GlobeSt.com – December 10, 2024
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Industrial Report: Automation
And AI Shape Future Demand
Commercial Property Executive – December 10, 2024
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Annual Inflation Rate Accelerates
To 2.7% In November, As Expected
CNBC – December 11, 2024
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Wholesale Prices Rise 0.4% In November;
Jobless Claims Jump To 242K, Pressuring Fed.
FXEmpire.com – December 12, 2024
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US Budget Deficit Climbs To $367 Billion
In November On Calendar Payment Shifts
Reuters – December 11, 2024
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R E G I O N A L   N E W S

Sustainability, Strategic Sites Shape
2025 Industrial Outlook In Chicago
REjournals – December 10, 2024
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Top 10 Markets For Cold Storage Development
Commercial Property Executive – November 21, 2024
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North Texas Cities Leads US Housing Growth
GlobeSt.com – December 10, 2024
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Amazon’s Push Into Same-Day Prescription
Delivery Heads To Dallas Area
CoStar – December 9, 2024
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Delta Electronics To Expand Plano Campus
Community Impact – December 10, 2024
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