Warehouse Leasing Tumbled at the End of 2022

The boom in the logistics property market appears to be over. The Wall Street Journal reports that leased industrial space across the U.S. tumbled 28.2% from the third quarter to the fourth quarter, as a drop in demand measured by Cushman & Wakefield accelerated during the second half of 2022.

Vacancy rates remain low, averaging 3.3% during the last three months of the year. But that was an increase from the end of the summer, and companies that have been building at a frenetic pace now face a potential glut in the market. 

The pull-back comes as retailers rein back their inventory replenishment efforts in an increasingly uncertain economy, prompting a fall-off in the online sales surge that helped fuel new warehouse demand during the pandemic. Receding demand could bring down prices, but that will take time in a business built on long-term leasing contracts.

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• Source: https://www.supplychainbrain.com/articles/36386-warehouse-leasing-tumbled-at-the-end-of-2022