Northeast U.S. Industrial & Logistics Construction Watch Report Q4 2024

As demand remained muted across the Northeast U.S. industrial and logistics (I&L) market, the development pipeline contracted 6.1%, quarter-over-quarter, to 30.8 million square feet (sq. ft.). And while the combined Pennsylvania markets saw a sizeable quarter-over-quarter decrease in the total amount under construction, activity in the Philadelphia Metro and PA I-78/I-81 Corridor totaled 15.8 million sq. ft., 51.3% of the Northeast U.S.’s total. In New Jersey, construction ticked up quarter-over-quarter after 4.3 million sq. ft. broke ground during Q4 2024, nearly doubling the Q4 2024 total, expanding the Northern and Central New Jersey pipeline to 9.5 million sq. ft., 30.8% of the Northeast U.S.’s total. New Jersey’s starts accounted for nearly the entire 5.6 million sq. ft. tallied across the Northeast U.S. in Q4 2024, down from the 7.4 million sq. ft. in Q3 2024 and bringing the annual total to 31.5 million sq. ft.

Pre-leasing rates for active construction across the region increased 140 basis points (bps) quarter-over-quarter to 16.6%. While overall pre-leasing persisted at levels lower than the pandemic boom years and even the pre-pandemic period, that metric showed signs of stabilization during the year. Pre-leasing rates for completed construction showed similar trends as 24.5% of the 9.0 million sq. ft. delivered during Q4 2024 was leased. Deliveries in 2024 totaled 40.5 million sq. ft.