North America Industrial Construction Cost Guide 2023

C U S H M A N & WA K E F I E L D

KEY TAKEAWAY The pipeline remains strong, with over 230 msf of industrial space currently under construction in the five markets with the largest pipeline. Five U.S. Sunbelt markets have construction pipelines above 10% of current inventory: Phoenix, Savannah, Las Vegas, Charleston, Austin and Fredericksburg. Outside of the U.S., Toronto has the most construction activity (21 msf) while Mexico City, Vancouver and Calgary each have between 8 and 9 msf under construction. The two Mexico markets Cushman & Wakefield tracks—Mexico City and Monterrey—and three Canadian markets— Calgary, Vancouver and London—have construction pipelines that amount to over 3.0% of current inventory.

ABSOLUTE BASIS: COMPLETIONS SINCE BEGINNING OF PANDEMIC (Q1 2020-Q4 2022)

Las Vegas Louisville Charlotte Central Valley CA

West South Northeast Midwest Latin America Canada

Mexico City Philadelphia Denver Salt Lake City Nashville

Dallas/Ft. Worth Houston Atlanta Chicago PA I-81/I-78 Corridor Phoenix Inland Empire Indianapolis Toronto Memphis Columbus Savannah Sao Paulo Kansas City New Jersey - Central

Construction Activity in Key Markets: Construction activity has been broad based as demand for additional space has been strong across the region. Since the beginning of 2020, eight different markets have seen more than 50 msf of new construction delivered and 19 markets have seen more than 20 msf. This is led by large U.S. Sunbelt markets—Dallas/Ft. Worth, Atlanta and Houston—and major Midwest industrial hubs—Chicago and Indianapolis. Outside the U.S., recent deliveries have been largest in Sao Paulo (27 msf) and Toronto (34 msf). On a percentage basis, smaller Sunbelt markets have led the way. More than a fifth of current inventory has been delivered in the past three years in Birmingham, Savannah and Austin. Already large industrial hub markets have added approximately 15% of inventory: Pennsylvania I-81/I-78 Distribution Corridor (18%), Indianapolis (16%), Phoenix (115%) and Houston (14%).

0

20 40 60 80

MSF

*Latin America as of Q3 2022 Source: Cushman & Wakefield Research

SHARE OF INVENTORY: COMPLETIONS SINCE BEGINNING OF PANDEMIC (Q1 2020-Q4 2022)

Total Completions Since 2020 Share of Inventory (rhs)

10% 15% 20% 25% 30% 35% 40%

20 30 40 50 60 70 80 90

MSF

0% 5%

0 10

Share of Current Inventory

Boise

Birmingham Savannah Austin

Tampa

Louisville Atlanta

Phoenix

Houston

Philadelphia Memphis

Columbus

Las Vegas

Charleston

Indianapolis

Fredericksburg Salt Lake City

Colorado Springs

Central Valley CA

Palm Beach County

Source: Cushman & Wakefield Research

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CUSHMAN & WAKEFIELD