A drop-off in construction starts means the current tenant-favorable dynamics may not last long, according to a report from Savills, which reported that quarterly construction starts in Q3 2023 were down 72% from the peak observed in Q2 2022.
This will result in lower supply and possibly lower vacancy rates by late 2024, according to report author Mark Russo, who is head of Industrial Research.
Despite this pullback, 602.1 million square feet of construction projects are underway across the US and the vast majority comprises speculative (spec) product, the bulk of which has yet to secure a tenant, Savills said.
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