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Report: North American Industrial Outlook

Market fundamentals in the North American industrial sector hit new records in 2021 despite pandemic-driven challenges. What’s the outlook for industrial real estate in 2022-2023?

The Industrial Market is Stronger Than Ever

The economic recovery and the accelerated buildout of e-commerce and 3PL last-mile facilities, fulfillment centers, and bulk warehouses will reinforce demand for industrial real estate. Although the COVID-19 pandemic brought on new challenges for the industrial market, with port congestion, materials shortages, and commodity pricing skyrocketing, the market has and will continue to excel.

What do we expect in 2022-2023?

The forecast for North American industrial absorption from 2022 to 2023 is a healthy 855 msf. New supply—which trailed demand significantly in 2021—will revert to outpacing demand slightly over the next two years. New deliveries are projected to reach 932 msf from 2022 to 2023. Nonetheless, North American vacancy will remain low, ending 2023 at 4.1%—an increase of only 30 bps from year-end 2021. Despite the forecasted uptick, North American vacancy will remain 170 bps below its 10-year average (2012-2021) of 5.8%. Average net asking rents in North America will increase to a new nominal high of USD 8.72 psf by year-end 2023. Supply-side constraints, such as onerous municipal approval processes, will continue to constrain supply growth in Canada where overall net rents will remain the highest in North America at USD 12.37 psf by the close of 2023.

North America Industrial Forecast - Supply

Key Takeaways:

  • Industrial demand is still booming, supply is going to catch up and alleviate some of the pressure by 2023
  • Strong market fundamentals will continue to generate strong rent growth that will continue throughout the next few years
  • Markets will remain tight on available quality space, despite record deliveries to come
  • Pandemic-related issues will begin to subside into 2022, bringing a bit of equilibrium back to the market

North America Industrial Forecast - Rent

North America Industrial Forecast - Absorption


Carolyn Salzer Rosemont Research
Carolyn Salzer

Director, Americas Head of Logistics & Industrial Research
Rosemont, United States

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Rebecca Rockey New York Research
Rebecca Rockey

Head of Economic Analysis & Forecasting
Washington, United States

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