Rents

Prologis found that rent growth for global logistics real estate rose 6% annually in 2023, following a record 30% gain in 2023, which the firm said underscores the resilience of logistics real estate fundamentals,

The national vacancy rate remaining low, at 4.8%, compared to a historical expansionary average of 6.1%, even as the pace of new deliveries quickened and added 70 basis point to market vacancies

The most recent edition of the Industrial Business Indicator (IBI), which was issued by San Francisco-based real estate investment trust company Prologis, presented what could be viewed as a somewhat mixed outlook for the industrial real estate sector, in terms of vacancy, rents, and space utilization, among other factors.

In its “U.S. Industrial Outlook: Q2 2022,” JLL cited various factors driving continued market strength, paced by rents topping the $8.00 per square-foot (PSF) mark, at $8.01, its highest level on record, with annual rent growth up 21% annually. Average PSF rents for warehousing & distribution and manufacturing came in at $8.04 and $7.79, respectively, with special purpose at $11.07.

The most recent edition of the Industrial Business Indicator (IBI), which was issued by San Francisco-based real estate investment trust company Prologis continued to highlight ongoing trends in the industrial real estate sector, relating to vacancy, rents, and space utilization, among other factors.

The company's Industrial Business Indicator (IBI) report stated that in the fourth quarter, United States vacancy, at 3.4%, dropped to an all-time low and is expected to remain at historic lows through 2022, with market rents pegged to increase by another 10%

The report, entitled “Industrial Occupiers Experiencing Sticker Shock at Lease Expiration,” pointed to how robust demand and new construction delays have reduced the industrial vacancy rate down to 3.6% in the third quarter, whereas annual rent growth increase a record-high 10.4%. And it also highlighted how occupiers inking five-year leases back in 2016, with an average 3% rent increase, are now seeing net increases of 25%, while making decisions on new occupancy.

In its “U.S. MarketFlash: Industrial Taking Rents Now Growing Faster Than Asking Rents, Reflecting Voracious Demand,” CBRE reported that average industrial asking rents headed up by a record 8.3% in the fourth quarter of 2020 and by 7.1% in the first quarter of 2021, with asking rents averaging 6.8% over the past five years.

Given the strong economic outlook at the moment, it stands to reason that there have been various subsequent takeaways. One key one was highlighted in a report recently issued by commercial real estate firm CBRE, whose main thesis was that for the year ending March 31, global prime logistics rents saw gains, due, in large part, to the improving global economy, as well as increased demand for goods bought both at physical store locations and online.

The fourth quarter of 2017 and the calendar year over all were very solid for United States industrial real estate activity, according to research recently issued by Chicago-based industrial real estate firm JLL. Two of the biggest takeaways of the research, entitled "First Look at Industrial," focused on the U.S. industrial vacancy rate and rents.

The industrial real estate market remains in a strong position for various reasons, according to the Second Quarter Industrial Outlook report from commercial real estate firm JLL.