Industrial demand is expected to soften heading into 2023 but will be tempered by an expected uptick in e-commerce growth, according to new research from Colliers.

In a report tracking the top 25 industrial markets, the firm noted that none of the metros it surveyed reported vacancies in excess of 7%. However, three reported vacancies north of 6%: Denver (6.6%), Milwaukee (6.5%) and Memphis (6.2%). On the other end of the spectrum, burgeoning demand pushed vacancy lower than 3% in eight metros: greater Los Angeles, Cincinnati, Columbus, St. Louis, the New York City metro, Phoenix, Minneapolis and the San Francisco Bay Area.

New deliveries totaled nearly 332 million square feet nationwide, and Colliers notes that "record levels of product under construction will boost supply even further by yearend and into 2023," as nearly 657 million square feet of industrial product were under construction at the end of the third quarter. In addition, Dallas-Forth Worth, Atlanta and Chicago all posted year-to-date new supply greater than 20 million square feet. The three cities also had 30 million square feet under construction at the end of the third quarter.