Research

U.S. industrial market statistics, trends, & outlook

U.S. industrial remains stable posting a strong rental growth in the third quarter

In the third quarter, the U.S. industrial market maintained the momentum seen in the first half of 2018. Annual rental growth accelerated to 6.3 percent, the highest annual growth rate so far in 2018. The U.S. vacancy remained stable for the third-consecutive quarter, at 4.8 percent and continues to be at an all-time historic low.

Despite a strong construction pipeline, strong pre-leasing trends in the newly built industrial product have helped keep the vacancy levels stable. Overall vacancy levels have been cut in half since the beginning of 2010 when it peaked at 10.2 percent in the first quarter of 2010. It is now 260 basis points lower than the lowest mark in late 2007/early 2008.

Class A market remains tight and is primarily driving rental growth. The U.S. industrial rents for Q3 reported a strong jump, moving closer to the $6.00-mark, at $5.74 per square foot. As top logistics markets continue to operate at a sub–3.0 percent vacancy rate, we expect continued competition for quality space to add pressure on rents through 2018. Comparing the top 10 most expensive logistics markets, West Coast cities make up 8 out of the 10 most expensive markets in the country.

Here are three things to keep an eye on in the coming months:

Click through the tabs below to compare market performance across key categories.

Inventory (s.f.)

Nearly 76.3 million square feet of industrial space was delivered. Of this, roughly 80.0 percent of the buildings delivered were under 500,000 square feet—an indicator of increased demand for mid-sized warehouse buildings.

Market Inventory (s.f.)
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Rental rates ($)

The U.S. industrial rents for Q3 reported a strong jump, moving closer to the $6.00-mark, at $5.74 per square foot.

Market Rental rates ($)
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YTD net absorption (s.f.)

Q3 posted the strongest quarterly total absorption so far for 2018 of logistics space.

Market YTD net absorption (s.f.)
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Total vacancy (%)

Vacancy remains at 4.8%, despite continued robust construction activity.

Market Total vacancy (%)
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Under construction (s.f.)

Despite a strong construction pipeline, strong pre-leasing trends in the newly built industrial product have helped keep the vacancy levels stable.

Market Under construction (s.f.)
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United States industrial property clock

JLL Industrial Outlook clock (image)

Source: JLL


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