#201 – Inside Our Industry – 1Q24 Newmark U.S. Industrial Conditions and Trends Report

Posted on | Inside Our Industry

Newmark recently shared their 1Q24 report, The U.S. Industrial Market: Conditions & Trends. Following are key points from their summary that we’d like to share with our readers. You can find the full report here.

1Q24 Newmark U.S. Industrial Conditions and Trends Report

Economic Conditions and Demand Drivers

  • Inflation remains above the target rate of 2.0%. With the job market largely sound, the first Fed rate cut will be prolonged. At the end of 2023, the market expected the first rate cut to come in the first half of 2024; at the end of the first quarter of 2024, that expectation has moved to September. That, too, may still be optimistic.
  • Evolving trends and new players in e-commerce are driving a comeback in leasing; e-commerce accounted for 14.7% of first-quarter 2024 top leasing activity, up from 3.5% one year ago.
  • Manufacturing construction spending has surged. In the last 12 months, $108 billion in manufacturing construction flowed into Southern states, nearly as much as the rest of the country combined.

Leasing Market Fundamentals

  • Nationally, absorption measured 27.9 msf in the first quarter of 2024, the softest quarter of net absorption since 2011, but a demonstration of the market’s resilient demand. Secondary and tertiary markets absorbed 92% of that absorption.
  • Vacancy continues to increase as new supply puts pressure on fundamentals. Vacancy rose to 6.0% in the first quarter of 2024, on the heels of 108 msf in new deliveries.


  • Vacancy will increase further as supply will likely outpace demand throughout the balance of the year. Supply – both in deliveries, and in development – will fall back to pre-pandemic levels by 2025.
  • With normalizing demand, industrial staffing has been flat. However, evolving labor dynamics stand to impact the industrial market. Potential strikes threaten East Coast port and transcontinental rail activity, while labor organization may spread across the Southern manufacturing sector. Looking ahead, hundreds of thousands of jobs are needed in coming years to support booming manufacturing construction underway.
  • Record industrial loan maturities are coming due in 2024. However, among all property types, the industrial sector has the lowest share of potentially troubled loans maturing.

Full report