Marching Ahead: Q4 2024 Industrial Review
The industrial real estate market continues to evolve, shaped by shifting economic conditions, tenant demand, and supply dynamics. In this edition, we take a data-driven look at Q4 2024, comparing key market metrics to the previous quarter and year-over-year trends to identify the strongest-performing markets. From rent growth and population growth to vacancy rates and new supply, this analysis highlights where momentum is building and possible markets to keep an eye on. This analysis includes only the industrial markets with an Asset Value above $10B as assessed by CoStar1, encompassing 65 markets, including the newly added Vallejo-Fairfield, CA.
Market Rent Growth
In Q4 2024, industrial rent growth continued at a steady pace. The average quarter-over-quarter growth was +0.50% (+2.00% annualized), slightly outpacing Q3’s +0.44%. Charlotte, NC, led quarterly gains with a +1.71% increase, followed closely by Tampa, FL (+1.69%) and Philadelphia, PA (+1.67%). Notably, Orlando, FL, continued to show strong rental appreciation, ranking among the top five for both quarterly (+1.59%) and annual growth (+6.60%). On a year-over-year basis, Cincinnati, OH, took the top spot with an impressive +7.92% increase, surpassing Jacksonville, FL, which had led in Q3. Overall, year-over-year rent growth averaged +3.55%, slightly lower than the Q3 average of +4.23%, indicating a continued moderation in rental appreciation across industrial markets.
Quarter-over-Quarter
- Charlotte, NC +1.71% [+$0.16/SF]
- Tampa, FL +1.69% [+$0.21/SF]
- Philadelphia, PA +1.67% [+$0.19/SF]
- Orlando, FL +1.59% [+$0.22/SF]
- Grand Rapids, MI +1.58% [+$0.11/SF]
- Average +0.50% [+2.00% Annualized]
Year-over-Year
- Cincinnati, OH +7.92% [+$0.57/SF]
- Jacksonville, FL +7.07% [+$0.71/SF]
- Milwaukee, WI +6.90% [+$0.48/SF]
- Columbus, OH +6.68% [+$0.51/SF]
- Orlando, FL +6.60% [+$0.87/SF]
- Average +3.55%
Inventory Growth
New supply additions remained a significant factor in market dynamics during Q4 2024. Savannah, GA, once again led inventory growth, posting a substantial +9.54% quarterly increase and +20.15% year-over-year expansion. These inventory gains in Savannah included the 12M square foot Hyundai Motor Group and LG Energy Solutions JV battery facility. While Savannah maintained its top position, other markets saw notable shifts. Worcester, MA (+3.05%) and Providence, RI (+2.30%) emerged as strong quarterly growth markets, reflecting increasing development activity outside traditional logistics hubs. Inventory expansion in Phoenix, AZ (+8.25% YoY) and Austin, TX (+7.26% YoY) remained robust, though slightly slower than the prior quarter’s pace. Overall, the year-over-year inventory growth average for Q4 was +2.49%, marginally below the Q3 average of +2.59%, signaling a gradual deceleration in new industrial supply.
Quarter-over-Quarter
- Savannah, GA +9.54% [+13.0M SF, +6 Buildings]
- Worcester, MA +3.05% [+3.5M SF, +3 Buildings]
- Providence, RI +2.30% [+3.8M SF, +1 Building]
- Austin, TX +2.06% [+3.3M SF, +49 Buildings]
- Phoenix, AZ +1.78% [+8.6M SF, +39 Buildings]
- Average +0.63% [+2.52% Annualized]
Year-over-Year
- Savannah, GA +20.15% [+25.1M SF, +37 Buildings]
- Las Vegas, NV +8.84% [+15.5M SF, +77 Buildings]
- Phoenix, AZ +8.25% [+37.5M SF, +187 Buildings]
- Charleston, SC +8.02% [+8.5M SF, +36 Buildings]
- Austin, TX +7.26% [+11.1M SF, +168 Buildings]
- Average +2.49%
Vacancy Change
Vacancy rates in Q4 2024 continued to exhibit mixed trends across markets. Savannah, GA, saw the most significant quarter-over-quarter vacancy reduction (-2.13%), aligning with its rapid absorption of new supply. Reno, NV (-0.86%) and Harrisburg, PA (-0.78%) also recorded strong declines, contrasting with the overall market average, which ticked up by +0.23%, reflecting ongoing supply outpacing demand in some areas. Year-over-year, vacancy rates remained positive on average (+1.49%), though at a slightly slower pace than Q3’s +1.70%. Saint Louis, MO, was the standout performer with a -0.27% annual decline, maintaining its trend from the previous quarter. Houston, TX, and Pittsburgh, PA, also saw year-over-year reductions, suggesting that certain markets continue to benefit from sustained tenant demand despite broader supply increases.
Quarter-over-Quarter
- Savannah, GA -2.13%
- Reno, NV -0.86%
- Harrisburg, PA -0.78%
- Inland Empire, CA -0.39%
- Raleigh, NC -0.30%
- Average +0.23% -
Year-over-Year
- Saint Louis, MO -0.27%
- Houston, TX -0.14%
- Pittsburgh, PA -0.12%
- Cleveland, OH -0.02%
- Grand Rapids, MI 0.02%
- Average +1.49%
Industrial Employment Growth
Industrial employment growth in Q4 2024 was led by Honolulu, HI, which posted a substantial +11.83% increase, a notable jump from its already strong +10.00% in Q3. Las Vegas, NV (+7.36%) and Charleston, SC (+5.25%) also experienced significant employment expansions. Overall, industrial employment growth across major markets averaged +0.92%, slightly below Q3’s +1.33%, indicating a cooling in labor demand, though still positive. The resilience of industrial job growth in port and logistics-heavy markets underscores the continued importance of supply chain and warehousing roles in these regions.
Year-over-Year
- Honolulu, HI +11.83% [+4.4K Employees]
- Las Vegas, NV +7.36% [+8.3K Employees]
- Charleston, SC +5.25% [+3.0K Employees]
- Norfolk, VA +5.07% [+5.1K Employees]
- Palm Beach, FL +4.09% [+2.8K Employees]
- Average +0.92%
Population Growth
Population trends in Q4 2024 continued to favor high-growth markets, with Austin, TX (+1.90%) maintaining its position as the leader, similar to Q3. Orlando, FL (+1.66%) and Palm Beach, FL (+1.57%) also remained among the top five, reinforcing Florida’s sustained demographic momentum. The overall annual population growth rate averaged +0.78%, a slight increase from Q3’s +0.77%. With continued in-migration to southeastern markets, population growth remains a key driver of industrial space demand, supporting long-term fundamentals in these regions.
Year-over-Year
- Austin, TX +1.90% [+47.3K People]
- Orlando, FL +1.66% [+46.9K People]
- Palm Beach, FL +1.57% [+24.1K People]
- Charlotte, NC +1.55% [+43.4K People]
- Raleigh, NC +1.54% [+23.4K People]
- Average +0.78%
1 Data collected from CoStar.