Construction and development of new industrial space in the U.S. remains robust, with all signs pointing to another big year in this market segment.
According to a report by CommmercialEdge, 592.5 million square feet of industrial space was under construction nationwide by the end of February, amounting to 3.5% of existing stock. Over the past six months, the amount of industrial space grew by more than 90 million sf.
About 626 million sf of new development was in the planning stages, CommmercialEdge reported. Rising rents have supported this action. The national average for in-place industrial rents across the top 30 U.S. markets reached $6.45 per sf in February, marking a 4.4% year-over-year increase.
The rest of 2022 continues to look strong in the industrial space. Nationally, transactions totaled nearly $9.1 billion in the first two months of the year. “This strong start is a clear indication that investor interest in industrial properties is anything but abating, given that the first quarter of a year is typically the slowest for commercial real estate transactions,” CommmercialEdge says.