In the face of numerous challenges, the industrial sector not only survived but thrived in the first half of 2023, surpassing initial expectations. This success was driven by a significant surge in demand, fueled by factors such as the ongoing growth of e-commerce and increased manufacturing activities. Furthermore, reshoring or nearshoring efforts amplified this effect as companies sought to secure supply chains and reduce reliance on foreign sources.
On a national level, some 262.3 million square feet of industrial space was completed in the first half of the year, CommercialEdge data shows. Industrial deliveries were up 28.6 percent when compared to the first half of 2022, when 204 million square feet of industrial space came online. Meanwhile, deliveries recorded a 61.2 percent uptick from the same timeframe in 2021, when 162.7 million square feet was added to stock.
The list below highlights the top markets for industrial deliveries in the first half of 2023 based on the total square footage added to the inventory. The five most active markets across the county accounted for almost 27.4 percent of all the new stock.
1. Dallas-Fort Worth
First on our list, the Dallas-Fort Worth market remains a promising venue for sustainable growth and profitability in the industrial sector, thanks to its strategic central location and well-connected highway and railway systems. The metro also continues to attract industrial players thanks to its business-friendly environment, prompting companies to open regional headquarters and distribution centers within its borders.
The most-active metro in terms of industrial construction activity, it added 29.3 million square feet of space in the first half of 2023, or 11.2 percent of total stock—the highest percentage on our list, according to CommercialEdge data. Dallas-Fort Worth also topped the list in terms of number of projects, with 69 developments coming online year-to-date in June.
Completions were up 53.9 percent compared to the first half of 2022—when 19 million square feet came online—and 141.1 percent more when compared to the first half of 2021, when deliveries totaled 12.2 million square feet of industrial space.
Meanwhile, industrial construction starts between January and June 2023 totaled 16.2 million square feet. This accounted for a 15.7 percent increase when compared to the 14 million square feet started in the first half of 2022.
The largest city in Texas, Houston benefits from its strategic Gulf Coast location, offering direct access to international trade routes through the Port of Houston. This prime logistical advantage enhances the market’s appeal for distribution and supply chain activities.
Houston added 11.3 million square feet of industrial space year-to-date in June, accounting for 4.3 percent of total stock. The amount was on par with the 11.2 million square feet added in the first half of 2022 but slightly less than the 11.7 million square feet delivered in the first half of 2021. Of the 48 properties completed this year, the largest one was Building 8 within the Interchange 249 industrial park in Tomball, Texas, consisting of a 908,853-square-foot asset developed by Lovett Industrial.
Industrial construction starts in the first six months of 2023 amounted to 6.7 million square feet, accounting for a 183 percent increase when compared to the same time in 2022, when only 2.3 million square feet started, according to CommercialEdge data.
Chicago’s historical significance in industries like manufacturing and its modern relevance in technology and e-commerce sectors continue to further elevate its appeal. Its diverse economy and substantial population drive a consistent demand for industrial spaces such as warehouses and distribution facilities. making it a compelling destination for industrial development on the long-term.
The metro added 11 million square feet across 33 properties in the first half of 2023, accounting for 4.2 percent of total stock. CommercialEdge shows a 25.6 percent increase in completions compared to the first six months of 2022, when some 8.8 million square feet was delivered. Additionally, this year’s deliveries topped 2021 completions, when roughly 10.8 million square feet of industrial space came online.
Developers broke ground on 17 properties totaling 7.9 million square feet year-to-date in June. This represents a 37.7 percent increase from the 5.7 million square feet started during the same time in 2022.
Indianapolis’ status as a motorsports and manufacturing hub, its thriving tech scene, as well as robust economic dynamics make it an attractive destination for industrial construction. Situated centrally within the U.S., this geographical advantage fortifies its status as a major logistics and distribution hub.
The metro added some 10.6 million square feet of industrial space in the first half of 2023, representing 4.0 percent of total stock. Deliveries were up 20.2 percent from the previous year, when some 8.8 million square feet of space was completed, and up 44.7 percent from the first half of 2021, when 7.3 million square feet came online. The largest industrial asset to come online was Walmart’s 2.2 million-square-foot fulfillment center, situated at 5259 West 500 North in McCordsville, Ind.
At the same time, industrial construction starts year-to-date in June amounted to 3.3 million square feet across 10 projects. This translates into a 143.5 percent growth from the same time in 2022, when 1.3 million square feet broke ground.
5. Greenville, S.C.
Greenville’s reputation as an automotive and advanced manufacturing center, coupled with its commitment to innovation, attracted industrial investment prospects to the area. In the first six months of 2023, developers added 9.6 million square feet of industrial space across 25 properties. This accounted for 3.7 percent of total stock.
According to CommercialEdge, the largest asset to come online was 1000 Innovation Way, a one million-square-foot project in Anderson, S.C. The building was developed by Techtronic Industries, and it will be fully occupied by the building materials supplier.
Construction activity within the metro was tempered in the last two years; Five properties totaling close to 600,000 square feet came online in the first six months of 2022, while industrial completions in the first half of 2021 had totaled just 909,823 square feet.
At the same time, industrial construction starts reached 4 million square feet year-to-date in June, a slight uptick compared to the 3.8 million square feet delivered during the same timeframe in 2022.
These metros accounted for more than a quarter of all the new industrial inventory nationwide, CommercialEdge data shows.
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