The U.S. industrial real estate market saw record-setting low vacancy rates in the last quarter of 2021.
Cushman & Wakefield’s Q4 U.S. industrial statistics show record-setting absorption exceeding 500 million square feet (msf), and vacancy dropping below four percent for the first time ever, at 3.7 percent.
Rental rates are up as well, with 3.2 percent quarter-over-quarter and 9.5 percent year-over-year increases.
“We are seeing unprecedented low vacancy and incredibly high demand for industrial space across the United States. Demand is outpacing supply by a wide margin – almost 50 percent – and new leasing activity totaled 879.9 msf, a new record,” said Carolyn Salzer, Americas head of logistics and industrial research for Cushman & Wakefield.
“This level of demand put the market in place to see the first year ever of new leasing activity surpassing 800 msf at year-end. This continues to put upward pressure on rental rates, setting a new record of US$7.39 per square foot.”
The under-construction pipeline once again set a new record, with 568.2 msf in development, 54 percent above 2020 levels.
“Developers are setting new records on the pipeline, yet falling short of meeting demand for space when it comes to deliveries due to pandemic related issues, particularly for warehousing and e-commerce facilities,” said Salzer.
“Until significant new supply is able to be delivered at the rate of demand, we expect tenants to continue to struggle finding the space they need. The market is as competitive as it has ever been.”