The industrial real estate market continues to progress through a mini-cycle as vacancy rates begin peaking and occupiers move cautiously to expand supply chain networks, according to a Prologis analysis.

Industrial utilization ticked up in January to 85.3% from 84% during the fourth quarter, according to the Prologis Industrial Business Indicator (IBITM). Factors that lowered space utilization through the end of the year included strong holiday sales that reduced warehouse inventories more quickly than they could be replenished. However, industrial sublease availability remains above historical norms, reflecting persistent excess capacity in some locations, said Prologis.

During the fourth quarter the IBI Activity Index showed a strong flow of goods through U.S. warehouses, growing 3.5% year over year in sales of retail goods and 15% to 20% year-over-year growth in import volumes.