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End of Year 2022 Industrial Market Report

Industrial Market Overview

Over the past few years, the industrial sector has experienced historical growth and record sales. Although the sector has performed well over the last year, helping mitigate the effects of a high inflationary period and volatile interest rate, the industrial market is seeing a shift. Rent growth is moderating, and construction starts are dropping. On the other hand, the demand for industrial facilities in 2021 and the start of 2022 has kept vacancy low, and leasing is still above pre-pandemic levels. Overall, the sector will be impacted by economic headwinds, but its success will hold fundamentals steady, and growth in niche submarkets will keep investors intrigued.


Key Highlights

  • 2022 delivered 415M square feet of industrial space
  • Vacancy rates continue to stay at record lows, averaging 4.0 percent
  • 12-month absorption in square feet reached 401M
  • Sale-leasebacks and 1031 Exchanges continue to drive acquisitions
  • Q4 2022 national asking rate per square foot is $11.02


Rents | Vacancy | Construction

Leasing slowed in Q4 2022 but is still up 60 percent when compared to the same period in the three prior years to the pandemic, according to CoStar. Seaports are reporting record highs of containerized imports, and tuck tonnage is rising. Cities like Savannah, Houston, and Miami are some of the most in demand markets for port industrial properties. Although inflation is running rampant, consumer spending has not been affected and is keeping industrial fundamentals strong, helping the sector avoid a steep decline in rent growth and keep vacancy low. Q4 2022 rent growth is 10.9 percent year-over-year, compared to the Q3 2022 rate of 11.6 percent. Moderating a bit over the past few months, rent growth is still significantly high due to the ongoing demand for industrial real estate. Due to constricted supply, industrial development went into overdrive in 2021 and 2022. CoStar reported U.S. stock of industrial facilities is set to grow four percent in 2023, the fastest supply growth in the last three decades. The robust pipeline caused worry as leasing began to slow mid-2022, but experts predict the new supply will not cause a negative shift in the market.


Sales Volume

Surprisingly, rising interest rates have not greatly impacted industrial sales so far in 2022. The sector may see a shift at the start of 2023 as the buyer pool weakens due to the tough financing market. Sale-leasebacks and 1031 Exchanges continue to gain popularity in the current economy, while other investors target fully leased properties to avoid having to hold a vacant investment. Total sales volume for 2022 reached $106B across the U.S., with the average price per square foot coming in at $157, an increase of $19 year-over-year. Crexi predicts the top markets to invest within in 2023 include Northern New Jersey, Miami, Los Angeles, New York City, Nashville, and Orange County.



Semiconductor Manufacturing

Several semiconductor manufacturing companies are committed to building warehouses in the U.S. Intel has plans to build a $20 billion plant in Ohio and Micron has stated it would invest up to $100 billion over the next 20 years to build plants in upstate New York.


EVs and Battery Manufacturing

EVs are impacting several commercial real estate sectors including industrial. CoStar reported that the company is tracking 18 EV, battery, and semiconductor warehouses that are set to open in 2024-2025. Increased consumer interest in EVs will continue to drive demand for manufacturing, storage, and packing facilities.


Market Outlook

The big question moving into 2023 is has industrial hit its peak? The short answer is probably not. The looming recession and difficult lending environment will impact the sector, but the last two years of record growth and performance will prop up industrial during challenging times. New technology manufacturing trends will generate leasing of millions of square feet, and port cities are set to keep high demand and rent growth.


Los Angeles

Similar to other coastal markets, LA industrial demand has not slowed, helping keep vacancy rates below the average national rate. Los Angeles is one of the largest industrial markets in the U.S., reporting a below average vacancy rate and one of the highest rent per square foot rates.

  • Market Rent Per SF: $18.35
  • Vacancy Rate: 2.3%
  • Average Sale Price: $9.2M
  • 12 Mo. Sales Volume: $9.2B



Developers have been extremely active throughout the Nashville MSA, delivering 7.4M square feet over the past 12 months. Although construction has ramped up, the market is still predicted to keep vacancy rates at record lows.

  • Market Rent Per SF: $10.07
  • Vacancy Rate: 2.7%
  • Average Sale Price: $5.9M
  • 12 Mo. Sales Volume: $2B


Fort Lauderdale

Outpacing the national average, Fort Lauderdale industrial rent growth averaged 16.8 percent in Q4 2022. The market’s pipeline is up compared to previous years but vacancy has remained below the region’s 10-year average. Fort Lauderdale also boasts a much higher rent per square foot rate than the national average.

  • Market Rent Per SF: $18.10
  • Vacancy Rate: 4.0%
  • Average Sale Price: $5.4M
  • 12 Mo. Sales Volume: $2.3B



Boasting the second largest industrial inventory, just behind Chicago, Dallas-Fort Worth delivered 1.1B square feet in 2022. Q4 2022 year-over-year rent growth is 13.4 percent, one of the strongest rates in the nation.

  • Market Rent Per SF: $8.79
  • Vacancy Rate: 5.4%
  • Average Sale Price: $5.6M
  • 12 Mo. Sales Volume: $2.5B



Atlanta’s overall economy and location has contributed to the market’s strong industrial performance. Featuring port access, low business costs, and a growing population, the Southeast market has been a hot spot for developers over the past year.

  • Market Rent Per SF: $8.27
  • Vacancy Rate: 3.5%
  • Average Sale Price: $5.3M
  • 12 Mo. Sales Volume: $5.2B



The average vacancy rate for Phoenix is historically low as demand for e-commerce, data centers, and logistics continues to thrive. 2022 sales volume reached an all-time high, outdoing the second-best year on record significantly.

  • Market Rent Per SF: $11.67
  • Vacancy Rate: 4.8%
  • Average Sale Price: $7M
  • 12-Mo. Sales Volume: $4.6B


Top Transactions of the Year

  • $2.4B portfolio sale of 128 properties throughout Texas
  • $187M sale of Elliot 202, a 1.2M-SF property in the Phoenix MSA
  • $151.2M sale of 338,000-SF industrial space in La Mirada, CA
  • $45.9M 182,3000-SF industrial space in Pomona, CA
  • $78.4M sale of Amazon facility in Alpharetta, GA
  • $45.9M 182,3000-SF industrial space in Pomona, CA

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