Same Story, Different Market – Industrial Real Estate Nationwide Shares Common Themes

Same Story, Different Market. RE Journals recently discussed Twin Cities market trends post-COVID. 

In various industrial markets nationwide, we are seeing this familiar narrative. Despite differing local markets, the underlying fundamentals remain consistent. 

  • Demand remains healthy. Though current tenant demand has dipped, this is due to abnormal market forces in 2021/2022. Demand is still stronger than pre-pandemic levels, and 2024 is expected to be more in line with pre-covid industrial market fundamentals. 
  • Record-setting spec construction deliveries coming online 2023 – 2024.
  • The average tenant is still finding it difficult to locate space and is not seeing great deals. A significant portion of the new spec supply coming online was larger construction (300,000 sf +).
  • Very little new construction is projected in 2024. New development does not pencil in right now.
  • Industrial transaction volume: There are plenty of buyers interested in industrial but the bid/ask spread remains. 
  • Absorption is projected to be solid in 2024. Vacancy rates to peak in mid-to-late 2024 before tightening by the end of 2024, into 2025.