{"id":42569,"date":"2025-02-13T14:45:52","date_gmt":"2025-02-13T11:45:52","guid":{"rendered":"https:\/\/www.commercialcafe.com\/blog\/?p=42569"},"modified":"2026-04-21T12:06:32","modified_gmt":"2026-04-21T09:06:32","slug":"q4-2024-industrial-ranking-report","status":"publish","type":"post","link":"https:\/\/www.commercialcafe.com\/blog\/q4-2024-industrial-ranking-report\/","title":{"rendered":"Q4 2024 Industrial Ranking Report: Phoenix Holds Onto #1 Spot as Nationwide Construction Slows"},"content":{"rendered":"
[vc_row][vc_column][vc_column_text css=””]In 2024’s last quarter, industrial real estate continued its trajectory as one of the steadiest commercial real estate classes. Pipelines continued slowing across most markets, while vacancies are still climbing at a measured pace. Consequently, in the fourth quarter of 2024, the overall trend for the market continued toward absorption of the record-breaking development of years past.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=”.vc_custom_1739176696234{border-top-width: 3px !important;border-right-width: 3px !important;border-bottom-width: 3px !important;border-left-width: 3px !important;padding-top: 10px !important;padding-right: 10px !important;padding-bottom: 10px !important;padding-left: 10px !important;background-color: #e8e8e8 !important;border-left-style: none !important;border-right-style: none !important;border-top-style: none !important;border-bottom-style: none !important;}”]To best capture the state and direction of the industrial real estate market, we looked at key performance indicators across 30 major industrial markets in the U.S., tracking them each quarter. Markets are ranked based on several metric categories: vacancy, pipeline, average rent, upcoming loan maturities, and quarterly shifts in online searches for industrial space.<\/p>\n

See the\u00a0methodology<\/strong><\/a> section\u00a0for details and read on for highlights of the best-scoring markets, followed by a breakdown of the ranking report by metric category.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=””]\n

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The market is steady and reasonable. The pullback in construction was inevitable and expected this year. As space gets absorbed in 2025 and 2026, we expect vacancy rates to plateau and the appetite for further development to pick up toward the latter part of the decade<\/em>.<\/p>\n

\u2013 Peter Kolaczynski, Director, Yardi Research<\/strong><\/p>\n<\/blockquote>\n

Key Takeaways<\/span><\/h2>\n
    \n
  • Overall:<\/strong> Phoenix retained the #1 spot as the best-positioned industrial real estate market, while Orange County and the Inland Empire in California completed the Q4 podium.<\/li>\n
  • Average rent: <\/strong>All 30 major markets saw yearly increases in average asking rents, with Orange County recording the highest nationwide average rent at $16.2 per square foot.<\/li>\n
  • Vacancy:<\/strong> The Orange County industrial market was also one of only five major markets to see dropping vacancies quarter-over-quarter, recording the lowest rate in the study at 4.2% in Q4.<\/li>\n
  • Industrial construction:<\/strong> Across the 30 major markets, the fourth quarter saw 34.5 million square feet of industrial space go online, while a further 188.2 million is currently under construction. Phoenix led both in Q4 deliveries and ongoing pipeline.<\/li>\n
  • Average sale price:<\/strong> At $458.40 per square foot, industrial space in the Bay Area still nets the highest average sale price nationwide, followed by three other Californian markets in Orange County, Los Angeles and the Inland Empire.<\/li>\n
  • Loan maturities:<\/strong> Portland, Ore. received top marks for having the lowest share of industrial real estate loans maturing in 2025, followed by Bridgeport, Conn., and Baltimore.<\/li>\n
  • Search trends:<\/strong> Online search volume for industrial real estate keywords in Q4 was highest in Houston, while Boston recorded the most search interest growth year-over-year.<\/li>\n<\/ul>\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=”.vc_custom_1730457801555{padding-top: 1px !important;padding-right: 5px !important;padding-bottom: 20px !important;padding-left: 5px !important;background-color: #0bbfeb !important;}”]\n

    Top 10 Best-Scoring Industrial Markets<\/span><\/h2>\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=””]\n

    Industrial space \u2014 scarcely available during 2021 and 2022 \u2014 is now much more accessible for occupiers. The national industrial vacancy rate in December was 8%, a significant surge from two years prior when the rate hovered below 4%. The contrast is even more stark in port markets like the Inland Empire, which had a sub-2% vacancy rate in 2022 but a 7.8% vacancy rate in December 2024. According to industrial property outlooks, industrial vacancy rates are expected to plateau in early 2025 before beginning to slowly tick down sometime in the second half of the year as supply is absorbed and new deliveries dry up.<\/em><\/p>\n

    \u2013 Peter Kolaczynski, Director, Yardi Research<\/strong><\/p><\/blockquote>\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text css=””]In Q4 2024, Phoenix held onto the title of best-scoring industrial market<\/strong>. The Valley of the Sun scored top marks in three different metrics, all of which are testaments to the market\u2019s ongoing expansion: The city scored highest in industrial space delivered in Q4 (7.16 million square feet), expansion of stock through Q4 deliveries (1.88%) and projected expansion from the current pipeline (5.75%).<\/p>\n

    However, not even the nation\u2019s fastest-growing industrial market proved to be immune to the sector\u2019s general construction slowdown. Phoenix\u2019s pipeline is also gradually declining, dropping to 22.3 million square feet in Q4 from 32.6 million in Q3. Nevertheless, Phoenix remains the most solid industrial market in the U.S. with a strong base in both manufacturing, as well as logistics.<\/p>\n

    \"Map<\/p>\n\n\n

    Claiming the runner-up spot, Orange County, Calif.,<\/strong> climbed no fewer than eight positions from Q3\u2019s ranking to finish with a score of 50.3 points. Orange County\u2019s significance in the logistics and distribution network of Southern California is evident through an industrial vacancy rate of 4.2% \u2014 the lowest among all 30 major markets included in the study and a 110-basis point (bps) drop from Q3 2024.<\/p>\n

    The market also scored well in terms of asking rent growth with a year-over-year (Y-o-Y) increase of 8.1% to maintain its status as the most expensive location to rent industrial space nationwide with an average cost per square foot of $16.2. At the same time, it was also the second-most expensive location by average sale price. In short, the Orange County industrial market is among the tightest in the nation, and the 1.5 million square feet of space underway here \u2014 a 0.75% expansion compared to current inventory \u2014 is unlikely to offer much leeway in the near future.<\/p>\n

    In third place, the neighboring Inland Empire, Calif.<\/strong> \u2014 the largest market by inventory in the entire top 10 at 667.1 million square feet \u2014 climbed four positions since the Q3 ranking, seeing higher average sale prices while the market’s pipeline continues to slip. On average, industrial properties here traded for $264 per square foot in the 12 months ending in December 2024, compared to $255 for the 12 months ending in September and $248 for December 2023. Online search interest for industrial keywords is also up 33% Y-o-Y, even as statewide searches dipped slightly in the same period.<\/p>\n

    Up next, Kansas City, Mo., reached #4 in our Q4 ranking report<\/strong>, after improving its scores in several key metrics. Most notably, KC is one of only five of the 30 major markets to see decreasing vacancy rates. In the fourth quarter of 2024, vacant industrial space in Kansas City<\/a> amounted to 4.9% of stock \u2014 the third-lowest among all locations in the study. What’s more, the market is also one of the few where new construction starts outpaced deliveries, which resulted in a growing pipeline quarter-over-quarter (Q-o-Q) \u2014 from 10.7 million square feet in Q3 to 11.5 million in Q4. Additionally, rents climbed by 5% Y-o-Y to go from $4.8 per square foot in December 2023 to $5.1 per square foot at the close of 2024.<\/p>\n

    Atlanta matched its Q3 performance with a fifth-place finish<\/strong>, with fundamentals in line with national trends. With yearly rent growth just below 10% and a vacancy rate of 6.8% in December 2024 \u2014 up 70 bps Y-o-Y \u2014 the market is also busy digesting fresh developments delivered in the last few years. Here, fourth-quarter deliveries totaled 2.2 million square feet of industrial space, expanding Atlanta\u2019s industrial real estate inventory<\/a> by 0.4%. Meanwhile, the 8 million square feet in the pipeline will bring the market\u2019s total up another 1.4%.<\/p>\n