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n the final quarter of 2024, industrial real estate remained a stable segment within commercial real estate, according to CommercialCafe. Development pipelines slowed across most markets, while vacancies rose at a controlled pace. As a result, the market trend in Q4 2024 focused on absorbing the record-breaking industrial developments of recent years.

    Key U.S. Industrial Market Insights:

    * Phoenix maintained its position as the leading industrial real estate market, with Orange County and the Inland Empire in California rounding out the top three.

    * Average rent increased annually in all 30 major markets, with Orange County posting the highest nationwide average at $16.2 per square foot.

    * Orange County was one of only five major markets to see a decline in vacancies quarter-over-quarter, achieving the lowest rate in the study at 4.2% in Q4.

    Industrial construction saw significant activity, with 34.5 million square feet delivered in Q4 and an additional 188.2 million square feet under construction across the 30 major markets. Phoenix led in both Q4 deliveries and active pipeline projects.

    The Bay Area remained the most expensive market for industrial space, with an average sale price of $458.40 per square foot, followed by Orange County, Los Angeles, and the Inland Empire.

    Peter Kolaczynski, Director at CommercialCafe, noted that industrial space has become more accessible due to increased supply, leading to a national vacancy rate of 8% in December 2024, up from sub-4% levels two years prior. Projections indicate vacancy rates will plateau in early 2025 before gradually declining later in the year.

    Top 10 U.S. Industrial Markets in Q4 2024:

    1. Phoenix, AZ - retained its position as the top-performing industrial market, leading in Q4 deliveries and inventory expansion.

    2. Orange County, CA - secured second place with a 4.2% vacancy rate and an 8.1% year-over-year rent increase.

    3. Inland Empire, CA - climbed four positions due to increasing property sales and online search interest for industrial space.

    4. Kansas City, MO - moved up in the rankings due to a declining vacancy rate and growing construction pipeline.

    5. Atlanta, GA - maintained its Q3 ranking with rising industrial rents and a vacancy rate of 6.8%.

    6. New Jersey - remained the Northeast's most expensive industrial rental market, with an average asking rent of $11.4 per square foot.

    7. Miami, FL - recorded the highest annual rent growth at nearly 15%, but saw a shift in market conditions with rising vacancy rates.

    8. Bridgeport, CT - ranked eighth with a Q4 vacancy rate of 4.7% and strong online search interest.

    9. Houston, TX - secured ninth place driven by strong online search interest and industrial space deliveries.

    10. Portland, OR - rounded out the top 10 with a 7.2% annual rent increase and the lowest percentage of industrial loans maturing in 2025.

    As 2025 approaches, the industrial real estate sector is expected to stabilize, with vacancy rates leveling off before a gradual decline later in the year.