T
he Baton Rouge metro's industrial real estate market remains tight, according to a recent report by Lee & Associates. The area saw a 23-basis point increase in its vacancy rate from Q2 2024, reaching 2.22%. This is still lower than the Q3 2023 rate of 3.03%, but overall vacancy increased by 90,306 square feet to 838,661 square feet.

    Despite this, net absorption has been positive year-to-date, with a total of 492,014 square feet absorbed so far. Every parish in the area has experienced positive absorption this year. Asking rental rates have also risen to $9.88 per square foot, up from $9.75 in Q2 2024.

    New construction permits issued rose significantly to 252,557 square feet, with a large project, the 61 North Logistics Center, accounting for most of the new development. However, only 132,618 square feet were added to inventory this quarter, and just 95,014 square feet will be added next quarter.

    Industry experts note that these trends are not unique to Baton Rouge, but rather consistent across markets along the I-10 corridor from Lake Charles to Mobile. The limited supply of industrial space continues to drive up rental rates and make it challenging for businesses to find suitable locations.