Availability rates are below their historical averages in nearly all U.S. industrial markets with especially tight conditions in port markets. For example, availability rates are 10 percentage points below their long-run averages in Charleston and Savannah, two port markets that have seen higher trade volumes.  Even landlocked ports like Louisville (air) and Atlanta (intermodal) have seen fundamentals tighten dramatically.

Sturdy population growth has been another driver of demand. Fast-growing Orlando and Phoenix, for example, have emerged as strategically important regional distribution hubs.

Meanwhile, availability rates in dense urban markets like New York City and San Francisco are closer to their long-term average. High operating costs and limited land availability continue to push distributors to more spacious adjacent markets, such as northern New Jersey and Vallejo, CA.

The universally tight conditions mean that most U.S. industrial markets can weather a modest leasing slowdown. Despite a softer economy in 2023, industrial availability rates will remain below historical norms. For many logistics centers, sub-3% availability rates could translate into 5%+ rent growth on average during the next five years.