While most sectors have slowed since early 2019, the warehouse/distribution market is still growing.

Buoyed by growth in e-commerce, the warehouse/distribution space absorbed 35.4 million square feet in Q4, which was its highest mark since Q1 2019 when 70.7 million square feet were absorbed, according to Moody's Analytics. In Q4, occupancy growth was 28.5 million square feet, while it was 24.2 million square feet in Q4 2019. The sector has gone more than a decade since it last experienced negative net absorption in 2010.

Construction for the new warehouse/distribution space fell to 25.8 million square feet in Q4 after hitting 38.2 million square feet added in Q3, according to Moody's Analytics. The space has posted an average of 36.8 million square feet of new inventory added per quarter in the prior six quarters. With demand increasing and supply decreasing, the vacancy rate dropped to 10.5% after sitting at 10.6% in the two previous quarters. It was higher than 10.3% in the fourth quarter of 2019.