While much attention and development activity has focused on larger industrial categories over the past several years, the small-bay tenant market is emerging as a strong performer on tighter supply and attractive investment characteristics.

The small-bay industrial market consists of properties with multiple tenants between 1,000 square feet and 10,000 square feet. Industrial spaces under 100,000 square feet, including small bay assets, represent 41.9 percent of the industrial market and have a vacancy rate of 4 percent, according to Newmark's first-quarter U.S. Industrial Market Conditions and Trends report. A significant portion of the segment's buildings were built before 2000.

The next largest segment is the 100,001 square foot to 300,000 square foot tranche with 27.1 percent share of the market and 7.4 percent vacancy. On the other end of the spectrum are properties exceeding 700,000 square feet, which account for 13.7% of the industrial market and have a vacancy rate of 9%.