In March, the average rent for industrial space nationwide rose to $8.44 per square foot, the latest Yardi Matrix industrial report shows.
Report Highlights
- The average national in-place rent for industrial space reached $8.44 per square foot in March, rising one cent from February and up 6.8 percent year-over-year.
- Nationwide industrial vacancy averaged 8.5 percent at the end of March.
- The gap between in-place rents and new lease rates was $1.92 per square foot as of the end March.
- The under-construction pipeline featured 345.5 million square feet of industrial space as of March.
- Industrial sales in the first quarter of 2025 totaled $11.7 billion, with industrial assets trading at an average of $126 per square foot.
Moderation tempers rent gains
The average national rent for industrial space in March reached $8.44 per square foot, edging up by just one cent from February and marking a 6.8 percent year-over-year increase. New Jersey led the country in rent growth, with a notable 11.74 percent jump. The Sun Belt remained the most dynamic region, with in-place rents surging 10.2 percent in Nashville, 9.5 percent in Atlanta, 9.2 percent in Miami and 8.5 percent in Dallas.
Still, signs point to a moderation in growth. The gap between leases signed over the past 12 months and the average in-place rent narrowed to $1.92 per square foot, down 21 cents from the previous month.
Nationally, the industrial vacancy rate ticked up to 8.5 percent in March, an increase of 30 basis points compared to February. While vacancies have been trending higher, Yardi Matrix anticipates stabilization in the latter half of 2025, with potential decreases beginning next year.
Among the country’s largest markets, Miami posted the highest vacancy rate at 11.5 percent, followed by Chicago (10.6 percent), Dallas (10 percent), Denver (9.8 percent) and New Jersey (9.6 percent).
Construction stays strong despite headwinds
As of March, the under-construction pipeline featured 345.5 million square feet, representing 1.7 percent of the total industrial inventory. Although new project starts have slowed in recent years, they continue to outpace pre-pandemic levels, according to Yardi Matrix. That trend may shift in 2025, however, as rising development costs—partly due to a 25 percent tariff on imported steel and aluminum—begin to weigh on the sector. Roughly a quarter of the steel and aluminum used domestically is imported, adding further pressure.
Some metros still boast significant construction pipelines relative to their existing stock. Memphis leads with 4.2 percent of its inventory underway, totaling 12.5 million square feet. Phoenix and Kansas City follow, each with 3.5 percent under construction—15.1 million and 10.5 million square feet, respectively. Other active markets include Dallas (2.4 percent, 24.8 million square feet), Denver (2.3 percent, 6.4 million square feet) and Houston (2.2 percent, 14.7 million square feet).
Industrial sales volume reached $11.7 billion in the first quarter of 2025. Investment was concentrated in New Jersey ($832 million), Dallas ($711 million), Chicago ($616 million) and Phoenix ($449 million).
Read the full Yardi Matrix Industrial Market Outlook: April 2025.
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