Warehouse Crunch Is Easing, But Pullback Will Be Modest

In our previous article we focused on the warehouse cost crunch facing the industry, with a specific focus on the fast-growing Inland Empire. Nearly six months later, we are revisiting this topic with another look at the industry; an outlook for 2023-2024; and guidance on preparing for a potential mild recession.

The U.S. warehouse sector is still unquestionably overheated, but the market's run of rent increases and tight supply appears to be cooling, with vacancies climbing modestly of late, according to Mohr Partners Commercial Real Estate analysis. As interest rates remain high, concerns about consumer optimism linger, and recession fears remaining front and center, retailers and suppliers will need to prepare to operate amid softening conditions.