With demand muted and speculative construction completions persisting at a healthy rate, the industrial vacancy rate ticked higher by 60 basis points to 5.2 percent, according to Cushman & Wakefield’s fourth quarter 2023 industrial report.

Although this is the first time the rate has surpassed the 5 percent mark since third quarter 2020, it remains 120 basis points below the long-term 15-year average of 6.4 percent.

“While the new development pipeline has exceeded demand, we are clearly seeing signs that construction is slowing in response to market conditions and tempered absorption totals,” says Jason Price, head of logistics and industrial research at Cushman & Wakefield. “Leasing velocity remains steady, but occupiers continue to shed excess space in some markets, leading to slower growth.”

On the market level, 58 of the 83 markets tracked by Cushman & Wakefield reported positive absorption in the fourth quarter, 19 of which surpassed 1