Industrial rents have continued to increase only minimally in the Midwest in November, with six of the bottom eight markets for rent growth coming from the region, according to Yardi Matrix’s December industrial Report.
St. Louis was the slowest-growing market, with in-place rents increasing 2.7% over the past 12 months. Kansas City industrial rents increased 3.2%, Detroit rose 3.6% and Minneapolis/St. Paul was up 4.2%, the report found.
National in-place rents for industrial space grew 6.9% year-over-year in November, reaching an average of $8.27 per square foot. That was up three cents from October, said Yardi Matrix.
Rents increased the most in Miami over the past 12 months, rising 11.1% to $12.11 per square foot. New Jersey industrial rent increased 10.5% to $11.37 per square foot, Inland Empire rents increased 10% to $10.69 per square foot and Atlanta rents increased 9.2% to $6.04 per square foot.
Southern California rents, which had grown at a much higher rate for most of the previous few years, decelerated in 2024, said Yardi Matrix. Los Angeles, for example, saw industrial rents increase 8.1% to $15.20 per square foot.
The industrial vacancy rate across the country was 7.5% in November, an uptick of 30 basis points for the month. Yardi Matrix attributed the increase to a wave of new supply and normalization of demand.
The spread between the market average in-place rent and a lease signed in the past 12 months was $2.15 in November. The spread was highest in Miami, where a new lease cost $5.86 more per foot, followed by Bridgeport ($4.40 per foot), New Jersey ($4.11 per foot) and Phoenix ($4.08 per foot).
Midwestern markets saw the lowest spreads between new rents and the market average, with St. Louis seeing new leases cost slightly less (-$0.17) than the market average rent, according to the report.