Warehouse cap rates have increased across the country by 23 basis points to 6.42% during the second quarter, with the highest regional rise in the East at 6.92%, up 44 bps. The smallest increase was in the Central region, which rose seven bps to 7.13%. Flex industrial property cap rates increased 17 bps to 6.93%, according to Integra Realty Resources' mid-year CRE report.

While leasing velocity slowed in most markets, e-commerce and supply chain needs continue to drive demand in the industrial sector, pushing rental rates higher, the report said. This is especially true in Charlotte, Miami, Boise and Phoenix. Industrial is outpacing other asset classes, including multifamily, the report said.

The sector is not immune to volatility, however. Industrial is experiencing higher vacancy rates in markets like Chicago, Indianapolis, Dallas and Los Angeles due to increased speculative development. Areas with limited new construction have maintained low vacancy rates and limited price volatility. Cleveland and Detroit are both examples of this trend, said IRR.