Rents for warehouse and distribution space are projected to climb 30% over the next five years in several key US industrial markets, as demand continues to outpace supply for the sector.
That's according to a new report from Cushman & Wakefield, which says "the importance of forecasting rent growth for warehouse/distribution has never been more critical" than in the current cycle. The firm predicts increases in asking rents for warehouse/distribution space in excess of 20% in 21 key US markets between Q4 2021 and Q4 2025, with Los Angeles, the Inland Empire of Southern California, Central New Jersey and Nashville predicted to exceed 30%.
Year-over-year rent growth for industrial space in Q1 2022 clocked in at 15.2%, driven by aggressive competition for space. The average price per square foot hit $7.89, a record high, while warehouse/distribution rents rose 15.7% over the same period.
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