In distinction to different segments inside industrial actual property, the economic sector’s fundamentals stay stable, regardless that the current increase is predicted to taper in 2024 and 2025. A slowdown in progress is already evident if we take a look at information supplied by CommercialEdge—with $32 billion price of commercial belongings spanning 337 million sq. ft altering palms within the U.S. year-to-date in October. This determine represents a 53 % lower from the sturdy transaction quantity recorded in the identical interval of 2022, exceeding $68.2 billion, and a 54 % decline from the $70 billion transacted in 2021.
Our listing spotlights markets that stand out as high performers in nationwide industrial transactions, utilizing CommercialEdge information. The mixed transaction quantity in these markets amounted to $10.8 billion, constituting 33.9 % of the general nationwide gross sales quantity.
1. Inland Empire
Southern California continues to indicate its resilience, significantly within the industrial sector. Within the Inland Empire, industrial gross sales have exceeded $3.3 billion year-to-date as of October, protecting 15 million sq. ft throughout 85 properties. This represents a big 25 % lower in comparison with the identical interval final yr, the place 117 properties totaling 15.3 million sq. ft had been bought for a complete of $4.4 billion.
Notably, this yr’s values additionally mark a 17 % drop from the almost $4 billion recorded throughout the identical interval in 2021, when 182 properties with a complete of 27.5 million sq. ft modified palms. Regardless of the decline in gross sales quantity, Inland Empire maintains a median value of $245.00 per sq. foot. CommercialEdge information highlights that whereas this determine is decrease than the averages of the earlier yr, lagging behind the $290.67 per sq. foot recorded in 2022, it nonetheless surpasses the 2021 common of $166.54 per sq. foot.
2. Los Angeles
Propelled by actions on the Port of Los Angeles and elevated demand for last-mile distribution facilities, Los Angeles clinched the second spot in our rankings. From January to October 2023, transaction quantity within the metro approached $2.8 billion, involving 11.2 million sq. ft throughout 112 properties. This determine signifies a 48 % lower, when in comparison with the identical interval in 2022, when 210 properties spanning 18.5 million sq. ft traded for a complete of $5.4 billion.
Industrial gross sales in 2023 decreased by 36 % in comparison with the $4.4 billion recorded in the course of the first 10 months of 2021, encompassing 248 properties totaling roughly 22 million sq. ft. In October, the common sale value for industrial properties stood at $308.93, based on CommercialEdge information. This determine carefully aligns with 2022 values, when industrial belongings traded at a median of $310.49 per sq. foot, however marked a 39 % improve from the $222.12 per sq. foot recorded in 2021.
3. New Jersey
In opposition to the backdrop of the actual property panorama in New Jersey, the primary 10 months of 2023 witnessed a change out there. A complete of 83 industrial properties comprising 9.5 million sq. ft modified palms, producing a mixed worth of $1.8 billion. This, nevertheless, signifies a notable 44 % lower in comparison with the $3.2 billion price of belongings bought throughout the identical interval in 2022, involving 188 properties totaling 19.7 million sq. ft.
Furthermore, industrial transaction exercise in 2023 skilled a 35 % drop from the $2.8 billion recorded in 2021, encompassing 165 properties protecting 18.2 million sq. ft. As of October, the common sale value for an industrial property was $229.58 per sq. foot, indicating a 28 % improve from the $179.35 per sq. foot reported in 2022 and a 22 % rise from the $187.67 recorded in 2021.
4. Phoenix
Within the midst of a spillover impact from neighboring markets like Los Angeles and the Inland Empire, Phoenix’s actual property panorama underwent shifts. As of October, industrial gross sales quantity surpassed $1.5 billion, involving 42 properties totaling 12.4 million sq. ft. Nevertheless, this can be a 46 % lower from the sturdy $2.8 billion recorded in the course of the first 10 months of 2022, when industrial gross sales comprised 96 properties that includes 19.3 million sq. ft.
The funding quantity in 2023 additionally skilled a 65 % lower in comparison with the $4.3 billion registered throughout the identical timeframe in 2021, involving 86 properties totaling 29.5 million sq. ft. Notably, the common sale value for an industrial asset remained comparatively steady over the previous three years, CommercialEdge information exhibits. In 2023, industrial belongings traded at a median of $160.61 per sq. foot, carefully aligned with the $168.64 per square-foot common of 2022 and the common recorded in 2021, which stood at $164.33 per sq. foot.
5. Bay Space
Within the dynamic panorama of the Bay Space, transaction exercise year-to-date as of October reached $1.4 billion. Roughly 6.6 million sq. ft of commercial house modified palms throughout 51 properties. This marks an 18 % decline in industrial funding in comparison with the identical interval in 2022, when 78 properties totaling 8.7 million sq. ft modified possession for $1.7 billion.
The gross sales quantity for this yr displays the identical drop when in comparison with the primary 10 months of 2021. Throughout that interval, 96 properties encompassing 8.8 million sq. ft had been bought for $1.7 billion. In the meantime, the common sale value for an industrial property stood at $342.79 per sq. foot in October. This means a 44 % improve from the 2022 common of $237.42 per sq. foot and a 55 % rise from the 2021 common of $220.19 per sq. foot.
