It was a record third quarter for the U.S. industrial market by just about every key metric.
Vacancy fell to an all-time low of 4.1 percent on the back of a record 140 million square feet of net absorption, according to the Business Journals. Average rents reached an all-time high of $7.18 per square foot.
Developers are also setting records: The 521.4 million square feet of space under construction in the quarter was the most ever. Around 340 million square feet is slated for delivery this year.
The industrial market has been on fire for a few years and especially during the pandemic, thanks in large part to demand for logistics space to cater to the growing e-commerce sector.
Some metrics in the first three quarters of 2021, including net absorption, have already surpassed previous yearly totals or are close to doing so.
The 366 million square feet of net absorption so far this year has blown past 2018’s total of 306 million, while 667 million square feet of leasing volume nears last year’s total of 699 million.
Rent for new construction industrial properties — designed with high ceilings and often dozens of loading bays for modern needs — in some prime markets have grown by 24.3 percent since 2019.
Vacancy in some of the tightest markets is now well below 2 percent. Los Angeles’ vacancy rate fell from 1.7 percent in Q2 down to 1.4 percent in Q3.
[The Business Journals] — Dennis Lynch