For the fourth quarter of 2024, Phoenix has emerged as the top industrial market across the United States, according to the latest report by CommercialCafe. This ranking reflects the continuing growth and demand for industrial space within the city, with impressive numbers showcasing its expansion.
CommercialCafe's comprehensive analysis covered key performance indicators from 30 major industrial markets nationwide, focusing on elements such as vacancy rates, pipeline developments, average rent, loan maturities, and online search trends for industrial space. The report highlighted the resilience and vibrancy of industrial real estate, marking Phoenix's notable accomplishments.
Throughout Q4 2024, Phoenix delivered 7.16 million square feet of new industrial space, securing the number one position for this metric. The city's industrial market not only led the way with significant contributions to overall inventory but also showcased impressive development projects currently underway.
One of the standout figures from the report is Phoenix’s industrial pipeline, which boasts 22.3 million square feet under development. This figure indicates a promising projected inventory expansion of around 5.8%. The recent growth reflects increasing confidence and demand from businesses seeking operational space.
Another metric where Phoenix excelled was the expansion of its industrial stock. The market recorded a growth rate of 1.88% through Q4 deliveries, putting it at the forefront of market performance. The continuous investments and projects underway underline the sustained interest of investors and developers alike.
When comparing Phoenix to its peers, Orange County and the Inland Empire, both of California, completed the top three rankings for Q4 2024. Orange County placed second overall, with its industrial market capturing noteworthy attention for multiple reasons. Across the board, all 30 major markets analyzed by CommercialCafe noted yearly increases in average asking rents.
For the year, Orange County recorded the highest average rent nationwide at $16.2 per square foot. This surge reflects broader economic trends and the intense competition for limited industrial real estate. The Inland Empire also maintained its own solid performance, emphasizing the importance of these Californian markets within the overall industrial framework.
Despite rising rents, the industrial market faced some favorable trends, particularly concerning vacancy rates. Orange County was one of only five major markets to observe declining vacancies quarter-over-quarter. It reported the lowest rate at 4.2% for Q4, signifying effective absorption of industrial space within the market.
On the national stage, the fourth quarter saw 34.5 million square feet of new industrial space come online across the 30 major markets surveyed. This influx is complemented by the staggering 188.2 million square feet currently under construction, which points toward continued demand for industrial space amid the recoveries following disruptions faced during the pandemic.
Further highlighting regional contrasts, the Bay Area remained home to the most expensive industrial real estate, with average sale prices reaching $458.40 per square foot. Following closely were markets such as Orange County, Los Angeles, and the Inland Empire, all boasting high price points driven by demand and geographical advantages.
Interestingly, the report also delved deep on financing aspects within the industrial market. Portland, Oregon, received commendations for having the lowest share of maturing industrial real estate loans scheduled for 2025, underscoring the city’s financial stability. Bridgeport, Connecticut, and Baltimore rounded out the top three, indicating localized strengths based on market conditions.
Analyzing online search trends, Houston showed the highest volume for industrial real estate keywords during Q4, with year-over-year growth taking center stage for Boston, illustrating shifting interests and market dynamics. These insights imply potential directions for future developments and investments within the industrial property sector.
Overall, the findings of the Q4 2024 industrial markets ranking report paint a promising picture of the industrial real estate sector's strength and its response to economic recovery. With Phoenix leading the charge, the continuing demand for industrial spaces indicates vibrant momentum pushing toward 2025.