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America’s Red-Hot Warehouse Market Shows Signs of Cooling

October 14, 2022

Some space is starting to open up at America’s swamped distribution centers. The Wall Street Journal reports that vacancy rates are starting to tick up from historic lows and leasing deals are getting modestly tougher to sign.

Space across the warehousing sector remains tight but the strain on at least one choke point in supply chains appears to be easing under broader economic pressures. Real-estate executives say companies are growing more cautious about new agreements as borrowing costs rise and the economic outlook appears more uncertain. 

New numbers from Cushman & Wakefield show the vacancy rate rose last quarter for the first time in two years and that leasing activity fell back. Some of that was likely because construction of new buildings is lagging demand. But with retailers paring back excess inventories and imports slowing, more existing space may soon be available.