Industrial new supply continues to push vacancy higher: Leasing remains healthy

Overall industrial vacancy rate rose another 60 basis points since the close of 2023 to 5.8 percent, according to the latest data by Cushman & Wakefield. While vacancy continues to edge higher, it remains 120 basis points below the 10-year prepandemic average of 7 percent (2010-2019).

The development pipeline is significantly shrinking because healthy delivery totals coupled with a marked pullback in groundbreakings have led to a 40 percent annual decline. This trend will likely continue throughout the remainder of 2024 amid the higher interest-rate environment, setting the stage for fundamentals to quickly tighten on the other side of the supply wave.

“We continue to see the industrial sector adjust to market conditions, returning to prepandemic norms,” said Jason Price, Americas head of logistics & industrial research at Cushman & Wakefield. “The under-construction pipeline has now fallen for the sixth straight quarter and is down 10 percent quarte