US Industrial Sales Near $40B in 2022

Average price per square foot is 31.3 percent higher than it was a year ago


Record inflation and rising interest rates are no match for the unrelenting demand for industrial real estate in the United States. 

Even as prices continued to soar, investors spent $8.4 billion on warehousing around the country in the month of June. That brings the national year-to-date sales volume to $39.6 billion, according to a new report from CommercialEdge.

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The unrelenting demand, which far outpaces supply, pushed average pricing up to $138 per square foot in the second quarter, a 31.3 percent jump compared to the same quarter last year. That rate is also 12.4 percent higher than the first quarter, and it marks the seventh straight period of price gains. Since the fourth quarter of 2020, the average national sales price has jumped 67 percent, according to CommercialEdge.

At the same time, the average national rent increased 4.9 percent over the past year to $6.57 per square foot per year. New leases are signing at an average $7.65 per square foot, which is 88 cents higher per foot than the overall average.

Nearly 160 million square feet of new industrial space was completed in the first six months of the year, but at 4.6 percent, the national vacancy rate still fell 120 basis points compared to June 2021. About 11 million square feet of industrial space broke ground in June, bringing the national construction pipeline to 667.5 million square feet. And another 684.6 million square feet is in the planning stages.

Developers have also been forced to adopt new models of development and explore alternatives to the traditional single-floor industrial model. One option is the multistory industrial center, which is popular in Asia but a novelty in the U.S. The strategy costs about 40 percent more for the same square footage, but it may become a lucrative niche along with office and retail conversions.

Southern California continues to stand above the top submarkets as the most sought-after area in the country. Los Angeles had the widest spread between in-place rents and new leases in June, with new contracts signed at 41 percent higher than the national average.

Meanwhile, the Inland Empire logged the sharpest rent gains with a 7.4 percent year-over-year jump. It also remained the tightest industrial market in the U.S. with a 0.6 percent vacancy rate. Approximately $1.7 billion of industrial sales have been completed in the Inland Empire so far this year, and the average sale price of industrial properties has more than doubled in the last two years, from $138 per foot in 2020 to $299 in 2022. 

Gregory Cornfield can be reached at