Average rent per square foot paid for industrial space U.S. 2020-2022, by type
Office real estate is pricier
Industrial real estate is far from being the most expensive commercial property type. For instance, average rental rates in major U.S. metros for office space are much higher than those for industrial space. This is most likely because office units are generally located in urban areas where there is limited space and thus higher demand, whereas industrial units are more suited to the outskirts of such urban areas. Industrial units, such as warehouses or factories, require much more space because they need to house large, heavy equipment or serve as a storage unit for future shipments.
Big-box distribution space is gaining in importance
Warehouses and distribution may currently command the lowest average rent per square foot among industrial space types, but this looks set to change in the future. The taking rent is trending upwards in North America and the share of available distribution centers which are unoccupied is falling. More and more big-box distribution space inventory is coming onto the market every year, which indicates that demand for it is increasing.