Americas Industrial Construction Cost Guide 2024

INDUSTRIAL MARKET UPDATE INDUSTRIAL DEMAND AND CONSTRUCTION Demand for industrial space in the U.S. was strongest over the last three years—there was more absorption registered from 2021 through 2023 than any other three-year period. A total of 1.3 million square feet (msf) was absorbed in the U.S. from 2021 to 2023. However, there was a marked deceleration in absorption in 2023, which carried over into the first quarter of 2024, where only 14 msf was absorbed, the lowest quarterly level in over 10 years. Robust demand from an uptick in online retail sales and an increase in last mile warehousing to service next- and same-day deliveries led to a surge in industrial construction across the Americas. Close to 671 msf of new industrial inventory was delivered in 2023, accounting for 71% of total global industrial product delivered last year. In the U.S., an additional 115 msf was delivered in the first quarter this year. The construction pipeline has begun to slow as demand has started to ebb. At year-end 2023, the Americas construction pipeline stood at nearly 505 msf under construction, a 33% decline YOY. The U.S. industrial construction pipeline fell 40% YOY in the first quarter of 2024, with 405 msf under construction.

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Cushman & Wakefield