The industrial market's vacancy rate in 2024 is 3.7%, according to recent CBRE third quarter data. Judd Welliver, CBRE vice chairman, said in the 20 years he's been in the industry, he hasn't seen a vacancy rate that low and contends it might be the lowest the market has ever seen.
This vacancy rate, he said, has driven up rents and brought in institutional capital that would otherwise be investing in Los Angeles, Dallas or Chicago. This pool of investors include Prologis, which unloaded its portfolio and sold to EQT-Exeter in May. Welliver, along with CBRE's Bentley Smith, facilitated the $450 million sale, which is likely among the largest transactions in the nation.
Welliver said that 2024 did not match 2021 or 2022 in terms of transaction volume but that the year "surpassed normalcy" in terms of volume.
Chris Weirens, vice president at Transwestern, said he thinks 2025 will bring out new high-water marks for rent.
"I think we'll probably have plenty of tenants and companies expressing some frustration with the rents continuing to go up, especially these smaller companies that are 5,000 to 10,000 square feet," Weirens said.
On the other hand, rents are likely going to be the thing driving major sales, according to Welliver, predicting "an active market in the investment sales side."
"A lot of that's going to be driven by interest rates and where the economy goes," Welliver said. "it's tough to predict right now with a new government and everything, but I think generally speaking you'll see good stability, you'll see liquidity in the market, and you'll see the need for some new development."
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