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.