Slow and steady is winning the race for industrial landlords in the U.S. According to a new report by Cresa, landlords in Sun Belt markets that have experienced rapid growth over the past four years are now facing challenges with oversupply and rising vacancies. In contrast, landlords in markets that grew more steadily after the pandemic are gaining leverage over tenants due to tighter supply.

Austin, Phoenix, and Las Vegas, once booming industrial hubs during the pandemic-fueled e-commerce surge, are now seeing vacancy rates climb as new projects come online faster than tenants can fill them. Additionally, the rise in sublease space is providing tenants in these markets with more bargaining power than they've had in recent years.

Markets like Cleveland, Richmond, and Milwaukee are capitalizing on tighter industrial supply and steady demand, positioning themselves favorably amid shifting market dynamics. Vacancy rates in these metros are significantly lower than in their high-growth counterparts, allowing landlords to increase rents at a more measured pace.