Read the latest Yardi Matrix Industrial Market Report.
Industrial property sales totaled $6.1 billion during the first two months of 2025, the latest Yardi Matrix industrial report shows.
Report Highlights
- The average national in-place rent for industrial space reached $8.43 per square foot in February, rising eight cents from January and up 7.1 percent year-over-year.
- Nationwide industrial vacancy averaged 8.2 percent at the end of February.
- The gap between in-place rents and new lease rates was $2.13 per square foot as of the end February.
- The under-construction pipeline featured 344.9 million square feet of industrial space as of February.
- Industrial sales in the first two months of 2025 totaled $6.1 billion, with industrial assets trading at an average of $127 per square foot.
Industrial rent growth cools
In February, the average national in-place rent for industrial properties climbed to $8.43 per square foot, reflecting an eight-cent increase from January and a 7.1 percent year-over-year rise, according to Yardi Matrix.
Southern California markets continued to show signs of cooling, with in-place rents rising 8.9 percent annually in the Inland Empire and 7.7 percent in Los Angeles. The strongest rent growth over the past year was recorded in Columbus, Ohio (14.1 percent), followed by New Jersey (11.3 percent) and Nashville, Tenn. (10.0 percent).
The spread between new leases and the average rent across all leases narrowed to $2.13 in February. This premium has been gradually shrinking in recent quarters as higher vacancy rates have shifted more negotiating leverage to tenants.
Meanwhile, the national vacancy rate edged up to 8.2 percent in February, increasing by 20 basis points from the previous month. Over the past two years, the vacancy rate has doubled, driven by a steady influx of new supply entering the market while demand has remained stable.
Industrial construction adjusts to market shifts
In February, a total of 344.9 million square feet of industrial space was under construction across the country, accounting for 1.7 percent of the nation’s total inventory, according to Yardi Matrix. Construction starts saw a sharp slowdown last year, a trend that is expected to continue as demand stabilizes and rising tariffs push up material costs.
Phoenix led all U.S. markets in industrial development, with 16.1 million square feet—or 3.7 percent of its inventory—actively underway. Other high-growth markets included Memphis, Tenn., where 10.5 million square feet (3.5 percent of inventory) was in progress, followed by Kansas City, Mo. (10 million square feet or 3.4 percent), Dallas-Fort Worth (23.7 million square feet or 2.3 percent) and Denver (6.2 million square feet or 2.2 percent).
During the first two months of 2025, industrial property sales reached a total of $6.1 billion, with assets trading at an average price of $127 per square foot. Between 2019 and 2022, the national average sale price for industrial properties surged by 54 percent, though growth slowed significantly, rising by just 5 percent from 2022 to 2024.
Read the full Yardi Matrix Industrial Market Outlook: March 2025.
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