Skip to content
Search AI Powered

Latest Stories

Tight warehouse demand eased slightly in Q2, Cushman & Wakefield says

Vacancy rate exceeds 4.0% for first time since mid-year 2021 as developers add space and consumer demand cools.

warehouse store-5619201_1280.jpg

Industrial vacancy rates for warehouses and other buildings rose slightly in the second quarter, revealing the first softening in years of vice-like demand for inventory storage space in a tight market, according to a report from the commercial real estate services firm Cushman & Wakefield.

The news is in line with various measures showing a gradual slowing of the economy—such as the Logistics Managers Index (LMI)—as the Federal Reserve continues to keep interest rates high to fight overheated inflation.


The overall industrial vacancy rate increased by 60 basis points to 4.1% throughout the second quarter, marking the first time since mid-year 2021 in which the rate exceeded 4.0%, the Chicago-based firm said. Cushman & Wakefield defines the industrial real estate segment as including warehousing, distribution centers, manufacturing, industrial office services, and flex/high tech.

Fueling the rise in vacancy has been the strong completion totals of speculative developments across the marketplace coupled with the consolidation and right-sizing of occupiers due to tempered consumer demand and elevated inventory levels.

“While we have seen the amount of industrial space under construction drop, we are now seeing the impact of the robust pipeline of product coming to market and easing pressure on markets that were at historically low vacancy rates through the pandemic,” Jason Price, senior research director for U.S. Industrial & Logistics at Cushman & Wakefield, said in a release. “Coupling this with tempered consumer demand, we see generally softening market conditions.”

Developers helped to loosen the market for warehouse space by delivering more than 139.5 million square feet of new industrial product throughout the second quarter, the third highest quarterly total on record.

Still, most of that space was quickly gobbled up. Although a challenging economic climate has persisted, new leasing activity remained healthy with 141 million square feet of deals signed in the second quarter, down just 9.0% from the first quarter, the firm said. That puts the year-to-date total of 296 million square feet signed on par with the midyear average achieved from 2018-2020.

“Industrial markets are continuing to normalize after coming off historically high demand registered over the last few years. Vacancies remain below the five-year quarterly average even as the market cools somewhat,” said Price. “Demand for space continues to come from across a wide variety of industrial and warehouse users giving us confidence that market conditions will stabilize at a more balanced level.” 

 

The Latest

More Stories

legal scales and gavel

FMCSA rule would require greater broker transparency

A move by federal regulators to reinforce requirements for broker transparency in freight transactions is stirring debate among transportation groups, after the Federal Motor Carrier Safety Administration (FMCSA) published a “notice of proposed rulemaking” this week.

According to FMCSA, its draft rule would strive to make broker transparency more common, requiring greater sharing of the material information necessary for transportation industry parties to make informed business decisions and to support the efficient resolution of disputes.

Keep ReadingShow less

Featured

pickle robot unloading truck

Pickle Robot lands $50 million in VC for truck-unloading robots

The truck unloading automation provider Pickle Robot Co. today said it has raised $50 million in venture capital and will use the money to accelerate the development of new feature sets and build out the company’s commercial teams to unlock new markets and geographies.

The “series B” funding round was financed by an unnamed “strategic customer” as well as Teradyne Robotics Ventures, Toyota Ventures, Ranpak, Third Kind Venture Capital, One Madison Group, Hyperplane, Catapult Ventures, and others.

Keep ReadingShow less
chart of trucking conditions

FTR: Trucking sector outlook is bright for a two-year horizon

The trucking freight market is still on course to rebound from a two-year recession despite stumbling in September, according to the latest assessment by transportation industry analysis group FTR.

Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.

Keep ReadingShow less
chart of robot use in factories by country

Global robot density in factories has doubled in 7 years

Global robot density in factories has doubled in seven years, according to the “World Robotics 2024 report,” presented by the International Federation of Robotics (IFR).

Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.

Keep ReadingShow less
person using AI at a laptop

Gartner: GenAI set to impact procurement processes

Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.

Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.

Keep ReadingShow less