U.S. Industrial Vacancy Drops for Sixth Consecutive Quarter

Article originally posted on HERE on May 13, 2022

Q1 2022 was the third highest quarter for net absorption of industrial real estate space

U.S. industrial continues to be the Energizer Bunny of commercial real estate, with the national vacancy rate falling for the sixth consecutive quarter to 3.4% despite an influx of new product, JLL reported. The competitive environment continued to place upward pressure on rents and the average asking rent climbed to $7.62 per square foot in the first quarter, a 16% annual increase.

Demand remained strong across the country as occupiers absorbed 110.8 million square feet in Q1, the third highest quarter for net absorption on record. On the leasing front, activity rose 17% year-over-year, which suggests upcoming quarters may bring even greater occupancy gains.

As in the past few quarters, logistics & distribution companies and 3PL providers have been the leading drivers of demand. “Investors anticipate robust property fundamentals will offset higher borrowing costs and inflation, further driving capital towards the sector,” according to JLL.