The industrial sector continued to operate at full capacity, with e-commerce activity, fulfillment centers and logistics services feeding most of the new supplies being brought to market. according to CommercialEdge According to the data, nearly 700 million square feet of industrial space was under construction at the end of June nationally, accounting for 4 percent of total inventory.
Construction activity has been concentrated in the Sun Belt metros thanks to favorable market conditions and demographic trends, with Dallas-Fort Worth, Phoenix and the Inland Empire leading the way in this aspect. Port markets and logistics centers in the Midwest also performed well; Indianapolis, for example, has one of the largest pipelines in the country by area and the second largest by percentage of current inventory, CommercialEdge’s latest industry report shows.
Using CommercialEdge data, we have identified the top five industrial development markets in the country while looking at their active pipelines. These markets included 196 million square feet of industrial space under construction as of June, representing 28.0 percent of the country’s total inventory.
|Rank||Market||SF is under construction||Inventory percentage|
1. Dallas-Fort Worth
The Dallas-Fort Worth metro ranks first in industrial development nationwide, with 60.7 million square feet in progress as of June, representing 7.2 percent of total inventory. A combination of factors such as the state’s business-friendly environment, high internal migration, as well as corporate relocations have contributed to the region’s transformation into a desirable destination for industrial investment. Approximately 14.9 million square feet in the metro were delivered year-to-date in June, including approximately the second and third active markets combined.
Having become one of the largest distribution points in the United States, Dallas-Fort Worth is home to a wide variety of third-party logistics companies. One of them is DHL supply chain, which currently operates on the Elizabeth Creek Gateway Building-C in Justin, Texas, the largest project underway in the area. Construction of the 1.5 million-square-foot project began this spring, while completion is scheduled for the first quarter of 2023.
The industrial Phoenix market is developing in excess, fueled by demand from tenants fleeing supply-pressure and costly Southern California. The pipeline under construction included 44.4 million square feet of industrial space as of June, which is a staggering 15.5 percent of inventory. Deliveries in the first half of 2022 were approximately 7.9 million square feet.
The largest industrial project underway in the metro consists of the first phase of Taiwan Semiconductor Manufacturing CorporationIt has an area of 3.8 million square feet, and it rises 25 miles north of Phoenix. The $12 billion project represents the largest foreign investment in the country’s history and is expected to be completed in early 2024.
3. Inland Empire
Southern California is the most sought after industrial region in the country, and the Inland Empire is the main beneficiary. About 34.5 million square feet of industrial space was under construction in the metro as of June, accounting for 6.2 percent of total inventory. With the lowest vacancy rate in the country – 0.6 percent – and the highest rental growth, developers continue to be optimistic about the area.
Although there is just over 7.4 million square feet of online space in the metro between January and June 2022, development may be eased in the coming years due to the recent moratorium on new industrial development. It was the largest project in progress in the Inland Empire an introductionMerrill Mall, a massive warehouse rising at 8900 Merrill Ave. In Ontario, California. Upon completion, scheduled for the end of 2022, the 4 million-square-foot project will house Amazon’s largest manufacturing facility in the country.
The nation’s largest industrial market had 26.9 million square feet of running industrial space in June, or 2.7 percent of total inventory. In addition, 7.5 million square feet of industrial space was completed in the metro in the first half of 2022. With below-average rent rates ($5.38 per square foot) and vacancy (4.9 percent), the distribution center remained a new hotspot Industrial development, including the first multi-story warehouse project to be built in the Midwest.
Notable industrial developments in Chicago include the construction of 897,000 square feet to fit the facility Central Steel & Wire, at Gateway 57 Business Park in University Park, Illinois. Developed by a joint venture between Venture One Real Estate And the CRG, The Class A building is due for completion in early 2023 and is part of a 355-acre master planned project located south of downtown Chicago.
With its central location and easy access to national and international markets, Indianapolis has solidified its position as a major logistics hub in the United States. The Midwest market — home to the world’s second-largest FedEx hub — had 26.6 million square feet of industrial projects under construction in June, or 8.4 percent of metro inventory. Industrial deliveries in the first half of the year were 7.9 million square feet.
Walmart She is currently working on the largest development in the metro, a next generation fulfillment center dubbed Walmart Distribution Center. The 2.2 million square foot project will span 152 acres at 5300 W. County Road 500 N. in McCordsville, Ind. The retail giant has laid ground on the $600 million property in 2020, with deliveries scheduled for this fall.