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Industrial cap rates and sales price per square foot are anticipated to remain stable through the end of 2024.
The most notable changes are in leasing demand and absorption.
The asking price per square foot for lease is expected to increase $0.06/ sq ft in the fourth quarter. This small increase in rent is coupled with a large increase in the 12 month net absorption (12 month net absorption is currently 1,738,958 sq ft).
The vacancy rate is expected to decrease .07%. These projections indicate that a significant amount available inventory in Q4 will absorb while lease rates remaining strong.
How Will 2024 Compare to 2023?
Industrial vacancy is expected to be higher at the end of 2024 than one year prior. At end of 2023, the vacancy rate was 11.9%.
Lease rate per square foot is expected to be $6.69 by the end of this year which will be up 3.9% from $6.44/ sq ft at the end of 2023.
Although rent is still growing, it is growing at a much slower rate in 2024.
In 2023, rent grew 9.1% year over year while rent is expected to grow 3.9% year over year by the end of the fourth quarter.
Cap rates have increased slightly from 8.6% at the end of 2023 to 8.7% currently.
Market price per square foot has remained stable. At the end of 2023, the price per square foot was $64.
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