US industrial rents have grown significantly this year, despite—or perhaps driven by—the global coronavirus pandemic. According to the Winter 2020 US industrial and logistics report from Colliers International, US industrial rents have increased 5.6% year-over-year. Industrial rents continued to gain steam in the third quarter, increasing 2.6% quarter-over-quarter to $7.21 per square foot.

Although industrial assets have seen tremendous demand this year due to an increase in online shopping during the pandemic, Colliers attributes the rent growth to a large influx of new industrial supply, specifically modern distribution facilities. At the end of the third quarter, the US construction pipeline totaled 328 million square feet, including 75 mega-facilities, which total 1 million square feet or more.

Each of the top 25 US industrial markets experienced rent growth in the third quarter. Three markets—Dallas-Fort Worth, Detroit and Philadelphia—had significant rent growth, exceeding 10%. Dallas-Fort Worth is the only market where new construction activity aligned with rent growth. The market was at the top of both lists, and currently has more than 20 million square feet under construction. Although Detroit and Philadelphia both have construction pipeline that well exceed the national average.