A wave of new industrial supply coupled with normalization of demand led to an increase in the national vacancy rate in November to 7.5%, according to CommercialEdge’s December industrial market report. That is an increase of 30 basis points over October and a significant jump from a vacancy rate of 4% two years ago.

The industrial pipeline showed its first month-over-month growth in November, with more than 361 million square feet under construction, representing 1.8% of stock. Despite this increase, development has continued to decrease this year likely due to higher borrowing costs. More than 1.1 billion square feet of space was delivered between 2022 and 2023, including 630.3 million square feet last year, but only 330.7 million square feet have been delivered in 2024 through the end of November. Although construction has slowed, completions during 2024 still exceed annual completions prior to 2020, said CommercialEdgie.