In 2024, the industrial real estate market is navigating a period of adjustment marked by increased vacancy rates, cooling rent growth, and shifting tenant priorities. National vacancy has reached 6.4%, reflecting a broader rise in available space as new construction meets moderated demand. With annual rent growth slowing to 3.9%, tenants in key industrial hubs like Los Angeles and the Inland Empire are seeing some relief on costs. Regions like Lehigh Valley and Northern New Jersey, however, are standing out amid these trends. Both areas remain highly sought-after by e-commerce and logistics companies thanks to their strategic proximity to the Northeast’s major population centers. Lehigh Valley, with its growing reputation as a logistics hub, continues to attract tenants looking for efficient access to the I-78 corridor, serving both regional and national distribution needs. In Northern New Jersey, vacancy rates are climbing but remain below national averages due to sustained demand and limited land for new construction. Here, tenants prize proximity to New York City and the Port of Newark, particularly for last-mile distribution operations.
Despite a nationwide slowdown in rent growth, these hotspots continue to see strong interest from occupiers looking for well-connected, established industrial spaces. High construction costs and interest rates have tempered new developments, setting the stage for potential tightness in 2025 if demand outpaces supply. As the market stabilizes, regions like Lehigh Valley and Northern New Jersey are expected to remain pivotal in the evolving industrial landscape.
