MARKET TRENDS
- Vacancy has dropped 40 basis points (bps) since last quarter, now at 7.3%, marking the fourth consecutive decline from its peak of 8.3% in Q4 2023. This trend may persist as year-to-date deliveries are down over 33%, totaling just 3.4 million square feet (msf) compared to the previous year.
- Demand for industrial space surged in 2024, with year-to-date net absorption up nearly 500% compared to last year. Rent declines are slowing and expected to stabilize as large sublease availabilities are leased, like FFE Solutions Group’s 300,000-square-foot (sf) sublease at City Creek Industrial.
- Last quarter, the construction pipeline hit a five-year low of 2.1 msf. While it saw a marginal increase in Q3, indicating some stabilization after eight consecutive quarters of decline, new starts are expected to remain subdued until capital markets improve and rents stabilize.