The CRA Report: Q1 2024 – “The Battle of the Bulge”
By Robert G. (Gary) Bender on Jan 17, 2024
BATTLE OF THE BULGE:
Although the circumstances are significantly different than the World War II battle that defined this
name, the unprecedented amount of new warehouse space scheduled for completion of construction in
the first quarter of 2024 is quickly changing the dynamics of the U.S. Industrial/Warehouse market.
The construction of new warehouse space coupled with a significant slowdown in leasing of warehouse
space, which peaked in the fourth quarter of 2022, is quickly changing conditions in many markets
throughout the U.S. from a Landlord’s market to a Tenant’s market. Since the second quarter of 2022,
vacancies for warehouse/logistics space have increased from 3.9% to 6.0% and are projected to peak at
just over 7.5% in the 4th quarter of 2024.
It is impossible to predict if leasing will pick up in 2024 and thereafter; however, it is clear that
construction will slow significantly during the next few years. As such, supply and demand will likely
come back into equilibrium in 2025 making 2024 a Tenant’s market and an opportune time for
companies to be evaluating and leveraging the U.S. warehouse markets.
