According to Commercial Edge’s latest industry report, deliveries of industrial assets reached a record high of 450 Million Square Feet in 2022. In other interesting findings, the Inland Empire led the U.S. in rent growth and warehouse sales fell 30%.
U.S Industrial Market Registers Record of Deliveries in 2022
Commercial Edge published its National Industrial Report for January 2023, and one of the most important news is that a new industry record was set in 2022, with more than 450 million square feet delivered, and another 713 million square feet under construction at the end of the year.
Demand for commercial space was so high in 2022 that even if the above numbers sound like a lot (and they are), they weren’t enough to keep pace with demand: average vacancies across the top 30 markets in the U.S. fell throughout the year, closing at 3.%.
The company forecasts a steady increase in deliveries through 2026, with the first dip expected in 2027.
Warehouse Sales Fell 30% in 2022
According to the same report, industrial sales in the United States fell by 30% in 2022 compared to 2021.
Sales closed during 2022 amounted to $88.3 billion, a mere 70% of the $125.7 billion registered in 2021.
The two main causes behind the drop are the interest rate hikes enacted by the Federal Reserve an an increase in the average sales price of industrial buildings
The report forecasts that appetite for high-quality industrial assets will remain “incredibly strong” over the next 12 months and predicts that industrial sales “will remain muted in 2023, but could quickly rebound once rate hikes stop and the market adjusts to the new environment.”
The Inland Empire Leads the Country in Rent Growth
Southern California, for its part, confirmed its position as one of the tightest industrial markets in the United States.
The Inland Empire led the nation in industrial rent growth with an increase of 14.2% over the last 12 months. Los Angeles came in second with an increase of 10.4%, and Orange County was fourth, with rents increasing 7.3%.
Commercial Edge’s full report is available here.
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