The US industrial market saw vacancy tighten to 4.7% nationwide last quarter, while the Inland Empire hit a record 0.6%—but while price gains continue to march on, inflation and rising interest may begin to weigh on the sector in the near term. 

"Inflation and rising interest rates will reshape the transaction market in a variety of ways," analysts from CommercialEdge write in a new report breaking down Q1 sector data. "Some investors may be faced with the untenable proposition of purchasing a building with negative leverage, assuming that rent increases will continue and produce positive leverage in the future. Properties with vacancies or leases set to expire will command the highest price, as investors will be looking to quickly capture the rent growth that has occurred in the last two years. Many investors will be using this period to reevaluate their underwriting assumptions or even withdraw from the acquisition market for the time being."

But while some reporting suggests the buyer pool for industrial assets is shrinking, it's unlikely to impact pricing until rent growth cools and buyers cease including big rent gains in underwriting, those analysts say.