Lee & Associates

In the first half of 2024, high interest rates led to decreased demand, higher vacancy rates, reduced construction starts and lower property sales in industrial and office, according to Lee & Associates’ 2024 Q2 North America Market Report. Meanwhile, retail saw minimal development and continued low vacancies. Retail rent growth was particularly strong in the South and Southwest. Finally, high demand for multifamily, coupled with a sudden influx of supply in the second quarter of the year, has created a market where outcomes are highly tied to region. Midwest and Northeast multifamily markets have remained stronger than their counterparts in the South and Southwest, while Western markets saw mixed growth. Lee & Associates has made their full market report available here (with complete breakdowns of cap rates by city, market rents, vacancy rates, square footage information and more). The summaries for the industrial, office, retail and multifamily sectors below provide detailed insight into the trends and trajectories likely through the end of 2024. Industrial Overview: Activity, Growth Checked by High Interest Rates Industrial market performance across North America continued to downshift in the first half of this year.  Although net absorption remains positive, demand for industrial space has fallen to the lowest levels …

Economic headwinds such as elevated interest rates and persistent inflation led to mixed outcomes in the first quarter for industrial, office, retail and multifamily sectors, with market observers anticipating a contracting economy, as outlined by Lee & Associates’ 2024 Q1 North America Market Report. On the industrial front, market pressures — including interest rates and supply chain challenges — led to higher vacancy in the United States in the first quarter of the year. U.S. office space experienced its fifth consecutive year of contraction, as office worker attendance stagnated. Additional challenges, in the form of loans maturing in a high-rate environment, signal further challenges in the near future for the office landscape. Continued merchant demand, reduced closures and bankruptcies and limited supply converged to create a feeding frenzy for retail space, with vacancies at historic lows. And finally, geographically based factors drove multifamily markets, many of which (especially in the Midwest and Northeast) experienced a rebound in apartment demand fueled by rising consumer sentiment and moderating inflation, despite supply outpacing demand. Lee & Associates has made their full, first-quarter report available here (with breakdowns of cap rates by city, vacancy rates, market rents, inventory square footage and more). The summaries from each sector …