From the Director's Desk
The industrial sector continues to outperform compared to pre-pandemic months. The volume of industrial space absorbed continues to be double that of pre-pandemic levels. Net absorption was above 350 million SF in the last 12 months ending in January 2023. As a result, this sector had the second lowest vacancy rate at 4.6%, after the retail sector. With less available space, rent prices for industrial spaces grow faster than the other sectors at 10.2% year-over-year. Meanwhile, rents increase even faster for logistics space, with 11.5% year-over-year gains compared to 7.2% for flex space and 8.5% for specialized space.
The year is still young! Inflation, interest rates, supply chain, and geopolitical events are the main factors that will determine how commercial real estate will perform in the following months. Data shows that the industrial sector will continue to be one of the bright spots of commercial real estate in 2023.
Source: Commercial Market Insights Report - February 2023, National Association of REALTORS®