The chugging industrial engine that said, “I think I can,” has changed its tune to, “Wow, this track is steep.”
The newest Cushman & Wakefield report on the industrial market has found vacancy up 30 basis points to 7% in Q1 2025 and “modest” demand, causing market recalibration. Conditions have become closer to long-term averages before the pandemic, a likely sign of stability, if no longer standout performance.
Multiple factors — reduced construction, lower absorption, higher inventory, and slower construction — are jostling, causing changes in the market. Statistics in Q1 2025 show year-over-year construction down 32.8% and 5.7% off quarter-over-quarter. Completions were down 40.6% by year and 16.7% by quarter. However, the previous construction pace and overall absorption (down 3.0% year-over-year and 45.6% quarter-over-quarter) still left inventory up 0.4% over Q4 2024 and 2.2% over Q1 2024.
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