Some important industrial markets will see a deluge of new construction completed this year. The good news is that developers are finally showing more discipline and construction starts have fallen to their lowest point of the current cycle.

Some important industrial markets will see a deluge of new construction completed this year, including Dallas-Fort Worth (where the availability rate is already in double-digits), Riverside, Atlanta and Houston.

In a market like Phoenix, the construction boom will extend into 2025. Of the 33 million sq. ft. under construction in Phoenix – the most in the nation – one-third won’t complete until after 2024. Considering this, we forecast that the availability rate will surpass 12% next year.

In some emerging markets, such as Savannah and Austin, the supply pipeline amounts to nearly 12% of inventory—the only markets in this analysis with double-digit supply growth.

Landlords will need to be aggressive in leasing this new space—whether in Phoenix or Savannah. Nationally, the pre-leasing rate on completed buildings has plummeted to 32% from a peak of over 70% in 2021 and 2022.

The good news is that developers are finally showing more discipline and construction starts have fallen to their lowest point of the current cycle.

 

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