Key Takeaways
- With cooling warehousing demand and steeper access to credit, industrial construction normalized with 33% less industrial space underway now as compared to Q1 2023.
- Phoenix overtook Dallas to become the industrial market with the most space in the pipeline (42.5 million square feet).
- EV and chip manufacturing facilities are beginning to displace logistics centers from the list of largest industrial completions.
- Savannah, Ga., is home to the largest industrial development to be delivered in 2024 — the 17-million-square-foot Hyundai EV plant.
- The largest industrial completions in 2023 showcased the tail end of the warehouse construction boom, with all 10 largest properties being logistics facilities.
After a fiery hot start to the decade, logistics-led industrial development is now winding down and manufacturing is poised to take center stage. Considerable investments in domestic semiconductor and electric vehicle (EV) production are driving an unprecedented surge in manufacturing construction — and the effects of the boom can already be seen in the 2024 industrial development pipeline.
So, using industrial property construction data provided by CommercialEdge, we set out to identify the markets with the most new industrial supply underway, as well as the largest properties scheduled for delivery this year. What we found was that while the drop in construction of logistics centers is certainly being felt in the total square footage of new industrial projects, some markets are riding high on the manufacturing wave.
National Industrial Construction Drops 33% Y-o-Y, Phoenix Overtakes Dallas in Industrial Supply Underway
There is currently 463 million square feet of industrial space under construction nationwide, representing 2.4% of current industrial stock. The space currently in the pipeline represents a drop of almost one-third compared to January 2023, when the 690 million square feet of space underway stood as a testament to investor appetite and more lenient corporate lending conditions. However, since then, the square footage of new industrial projects breaking ground has been outpaced by completions, which led to the drop.
Check out the full report for more: https://www.commercialsearch.com/blog/national-industrial-construction-report/