The U.S. industrial market performance continues to downshift into 2024 while net absorption remains positive, the market clearly continued to lose steam over the balance of the year, with the second half of 2023 registering the lowest third and fourth quarter absorption tallies since 2010. From our perspective, however, the very early signs of a stabilization and eventual recovery in tenant demand are already emerging. Once the dust finally settles, we do not anticipate that the national vacancy rate will have risen above its 20-year average of 7.3%.
For those who have followed our previous reports, we have presented our view that the significant increase in new industrial supply that is currently being delivered into the market will only impact net absorption and pricing over the short run. From our perspective, this excess inventory will prove transitory and quickly work its way through the system, as a significant percentage of industrial projects that were slated for construction in 2023 were shelved, thereby capping future supply.
