U.S. Industrial Demand Continues to Outstrip Supply Growth
U.S. Industrial & Logistics | Q1 2022
27 Apr 2022 1 Minute Read
- After a record year for the U.S. industrial market in 2021, strong demand for space continued in Q1 2022.
- With an overall vacancy rate of just 3.1%, tight market conditions lowered absorption from a year ago. Net absorption totaled 93.8 million sq. ft. in Q1—down 10.4% year-over-year but still above the 10-year average.
- Construction completions totaling 86.2 million sq. ft. in Q1—62% preleased—increased by 27.5% year-over-year but were 27.8% less than in Q4 2021.
- Under-construction activity totaled 545.4 million sq. ft. in Q1, 32.5% of which was already preleased. Dallas/Ft. Worth, Atlanta, the PA I-78/81 Corridor and the Inland Empire accounted for one-third of the total.
- The average asking rent increased by 3.7% quarter-over-quarter and 11.8% year-over-year to a record-high $8.94 per sq. ft.
- Demand from occupiers needing safety stock to counter supply chain disruptions should result in further rental rate appreciation and a record-low vacancy rate despite a large amount of new development this year.