Industrial construction slows as supply outpaces demand

Industrial construction starts have slowed dramatically as tenant demand has waned and hurdles to new construction activity have grown, according to Cushman & Wakefield in its First Quarter U.S. Industrial Construction Overview.

“After a pandemic-infused, over-stimulated economy pushed consumer demand for durable goods to record levels in 2021 and 2022, industrial facilities were constructed at a feverish pace to meet occupier demand,” said Jason Price, senior director, Americas head of logistics & industrial research. “More than 1.8 billion square feet of industrial product has been delivered since the beginning of 2020, more than was constructed in the previous decade.”

The report shows that as economic uncertainty has persisted amid elevated inflation and high interest rates, occupier demand has moderated, leaving 52 percent of the newly built facilities in 2023 still available for lease and causing vacancy rates to increase nationwide. As a