Liz Young of The Wall Street Journal reports that warehouse vacancy rates are rising, and payrolls in the sector also contracted sharply last month as the pandemic-era boom fades. Young writes:
A contraction in the U.S. warehousing sector is deepening following a period of frenzied expansion during the pandemic.
Real-estate developers sharply pulled back construction of warehouses in the latest quarter, and logistics operators slashed warehousing payrolls last month, signs that the market is resetting heading into the busy holiday shopping season.
The amount of industrial real estate under construction in the third quarter fell to 309 million square feet, down 43% from the previous year and the steepest drop since 2008, according to real-estate services firm Cushman & Wakefield.
Developers are paring back their expansion plans as companies have held off on making leasing decisions and higher interest rates have pushed up borrowing costs. […]
“By next year, when another half of this current pipeline delivers, there’s not a lot behind it,” he said. “We should start having that inflection point at some point next year, and supply and demand come into more balance.”
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