Industrial supply outpaces demand for second consecutive quarter

Industrial supply has outpaced demand for the second consecutive quarter with overall net absorption down 9.4 percent in fourth quarter compared to third quarter, putting year-to-date absorption 15 percent behind the 2021 record total, according to Cushman & Wakefield. The South accounted for half of the fourth quarter total, although the region only represents one-third of the U.S. industrial inventory.

Vacancy ticked higher by 20 basis points quarter-over-quarter to 3.3 percent as new leasing activity fell and speculative construction completions continued at a healthy pace.

After reaching an all-time high for construction completions in third quarter, strong completion totals persisted in fourth quarter with 143.6 million square feet of deliveries. Construction completions were up 37 percent compared to year-to-date 2021, and almost 73 percent of completions were on a speculative basis.

The under-construction pipeline fell back below 700 million square fe