According to property research and listing service CommercialEdge, 592.5 million square feet of industrial space was under construction as of March 2022, with another 600 million in the planning stages. With demand driven by online retail and growing logistical needs at a global level, industrial has become one of the superstars of commercial real estate, experiencing accelerated growth in both sales and development in recent years.
To that end, CommercialSearch recently conducted a study using data provided by CommercialEdge to analyze how much industrial space was expected to be added in 20 major markets across the United States. The study also ranked the largest properties slated to open this year and the largest completions of 2021, highlighting the central position of distribution and fulfillment centers in industrial real estate.
Dallas-Fort Worth Expected to Add 38 Million Square Feet of Industrial Space in 2022
Dallas-Fort Worth (DFW) is expected to add the most new industrial inventory this year with just more than 38 million square feet of industrial space. The market also claimed the same title in CommercialSearch’s industrial pipeline for 2021, with projections for that year totaling 27.9 million square feet.
The strong demand for industrial space in Dallas and the rest of the DFW metroplex was driven by the metro’s status as a regional logistical hub and manufacturing center, compounded by growing high-tech sectors. In fact, besides a booming market for office properties, DFW’s growth also resulted in more than 208 million square feet of industrial space being developed here over the last 10 years according to another CommercialSearch study – the largest amount added by any market in the last decade.
Phoenix and Indianapolis Close Out Podium for 2022 Projected Industrial Deliveries
Phoenix is right behind DFW with 36.3 million square feet slated for delivery in 2022. Here, low vacancies and growing investments for industrial are contributing to the market’s growth. As a result, the Valley of the Sun is expected to deliver the second-most industrial real estate this year. Notably, the metro also had the second-largest projected completions during the previous year – 18.4 million square feet – after seeing steady growth in deliveries in previous years.
In particular, one trend to follow when it comes to industrial real estate is the growth of major transportation hubs as distribution and fulfillment centers take on increasingly larger roles at a regional level. In this regard, Indianapolis can be counted among the regional transportation hubs benefiting from this trend. The market is expected to add 26.9 million square feet of industrial space in 2022, with several major developments being build-to-suit projects for Amazon.
Other industrial markets with large industrial pipelines in 2022 include California’s Inland Empire (25.9 million square feet); Chicago (25.8 million square feet); and Houston (18.5 million square feet). And, with low vacancies and growing demand from retailers of all types, another year of record-high industrial development is very likely.
Tesla Factory in Austin Slated to Be 2022’s Largest Industrial Completion at 4.28 Million Square Feet
Totaling nearly 4.3 million square feet, Tesla’s new factory in Austin, Texas, is projected to be the largest industrial property to be completed in 2022. After breaking ground in July 2020 with a Q4 2021 completion target, the mammoth facility finally opened on April 7, 2022, with an all-night event that welcomed 15,000 attendees.
For the most part, online and brick-and-mortar retailers are primarily driving the largest industrial developments across the nation. With the exception of Tesla’s new factory and a GM battery plant in Ohio, every other completion among the largest scheduled for 2022 is a logistical and/or distribution center. Specifically, seven are owned or occupied by Amazon, ranging between 2.6 and 3.8 million square feet of industrial space. Similarly, a 2.7-million-square-foot Walmart distribution center in Ridgeville, South Carolina, also made the list at number nine.
And, last year’s completions tell an even clearer story, with all 10 of the largest properties belonging to Amazon or being built-to-suit for the company. These 10 properties total 37 million square feet of industrial space on their own, with the largest being the 3.86-million-square-foot 7001 Vollmer Road in Matteson, Illinois.
For more information on the markets expected to add the most industrial space in 2022, as well as a complete methodology, check out the full 2022 industrial pipeline on CommercialSearch.
