After the hectic pace of growth in industrial supply that occurred in 2022, 2023 is shaping up to be a more normal year. In the first five months of 2023, developers began work on 109.6 million square feet of industrial space, compared to a record 240.5 million in the same period of 2022.

But this was to be expected given rising interest rates and the normalization of demand, according to CommercialEdge's National Industrial Report for June 2023. Key industrial fundamentals remained healthy. Average in-place rents rose 11 cents from April to May to $7.29 per square foot, while new leases entered during the past year averaged $9.50 per square foot.

Markets around ports had the highest rent gains in May. In-place rents grew 17.1% in California's Inland Empire, 12.8% in Los Angeles, and 9.2% in Orange County. On the east coast, rents rose 10% in New Jersey and 9.7% in Boston.