Industrial rents are expected to continue their steady march upward well into 2022, inducing sticker shock in occupiers of warehouse space in pricey markets like the Northeast and Southern California.
A new report from CBRE indicates that for many industrial users, double-digit rent increases will be the norm: in central New Jersey, occupiers seeking to renew or move will see rents increasing by 64%, while users in California's Inland Empire and the city of Philadelphia will experience increases of 62%, respectively. California also is home to eight markets over the national average, thanks in part to historically low vacancy rates.
To add more context, CBRE researchers indicate that warehouse occupiers who signed five-year leases in 2016 are now facing rents that are an average of 25% higher as they look to renew or move (a tough option, CBRE notes, since vacancy is at a historic low nationally at 3.6%).
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