A new analysis from Prologis shows that the industrial sector is seeing a drop in vacancy rate to an average national record low of 3.1%.
Given how industrial has performed over the last few years, that might not seem remarkable at first blush, but there have been indications of factors that create demand slowing. For example, Amazon was reported dropping 5% of the warehouse space it snagged during the pandemic. And e-commerce sales as a percentage of total sales have dropped from the 2020 Q2 high of 16.4% back down to 14.3% in 2022 Q1. It's roughly in line again with the pre-pandemic growth curve.
And yet, Prologis said that in the second quarter, the low vacancy helped drive up rents by 6.9% because demand was higher than supply.
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