Industrial starts have fallen by nearly half this year to 66.2 million square feet in the third quarter compared to 100.6 million square feet in the first quarter, according to a report from CommercialEdge. Despite the slowdown Dallas and Phoenix continue to lead in new industrial development. These two markets combined were responsible for more than 17% of all industrial starts in the nation, with Phoenix at number one. 

Meanwhile rent growth is also occurring, despite the normalization of demand this year, with Southern California clocking in as the only region with double-digit rent growth. Inland Empire, Los Angeles, and Ocean County saw these increases.

The Western markets remained the most expensive in the U.S. Aside from Southern California, Seattle and Portland saw the next-largest growth in asking rents. Conversely, Denver saw the slowest growth and biggest drop in average sale prices, with a 24% decline in 2023.