Industrial Property Rents Start The Year Strong

Industrial space rents across the U.S. have shown an upward trend at the start of the year, coinciding with growth in U.S. manufacturing, according to CommercialEdge.

In January, the average rent for industrial properties nationwide was $8.35 per square foot, marking a 6.8% increase compared to the same time last year, as reported by CommercialEdge, a division of Yardi.

Industrial rent prices can vary significantly by region, with several cities in the West experiencing rents over $10 per square foot. Notably, Orange County and Los Angeles saw the highest rents tracked by CommercialEdge, with rates of $16.56 and $14.99 per square foot, respectively. Other cities with high rents included Seattle ($11.61), New Jersey ($11.51), The Inland Empire ($11.06), and Boston ($11.03).

CommercialEdge’s latest industrial report also highlights a significant increase in manufacturing facility construction, with activity tripling since 2021.

However, the sector faces challenges, such as securing suitable land near labor pools and essential resources like water and power. Additionally, tariffs could pose a risk, especially for companies operating near Mexico.

“Trade policy could potentially spark a trade war and lead to retaliatory tariffs, which would impact manufacturers who rely heavily on exports,” said Peter Kolaczynski, director of CommercialEdge.

Source: Scotman’s Guide