Demand for industrial space appears to have bottomed out after two straight years of declining mass occupancies in the first half of 2022 and 2023. But even as mass occupancies are on the rise, some markets continue to struggle. Double-digit vacancy rates have emerged in areas of oversupply, where market normalization may take longer than in areas where there is less new construction.

Block occupancies increased in all regions, but were particularly strong in the Western United States, where activity totaled 55 million square feet across 213 transactions, reflecting a 47% increase per year. compared to the first half of 2023. The largest percentage increase was in the Northeast, where block occupancies increased in all regions. occupancies reached 14.4 million square feet, reflecting a 74% increase from last year. In contrast, the South Central and Midwest regions saw declines, with bulk occupancy rates down 36% and 23%, respectively. However, total square footage still stood at 16 million square feet in the South Central region and 35 million square feet in the Midwest.

Despite these fluctuations, demand for large industrial spaces over 100,000 square feet is expected to trend toward pre-pandemic levels. Hurvitz noted that while demand may not reach the record levels of 2021 and 2022, the slowdown in new construction and a gradual rebound in demand could provide relief to landlords facing oversupply and falling rents. .