Apartment Rents Keep Rising, Reach New Record, Data Shows

Originally published on July 6, 2021 by Beth Mattson-Teig for WealthManagement.com.

Although the pandemic caused tenants in other real estate sectors to hit the brakes on a new leasing, that was not the case in industrial. The industrial market saw a robust year of leasing activity in 2020 that has carried over into 2021. According to Cushman & Wakefield, net absorption for 2020 reached 268.4 million sq. ft., surpassing the 240.9 million sq. ft. reported at year-end 2019 by 11.4 percent. Demand roared into the first quarter with 82.3 million sq. ft. of net absorption—a record high for the first quarter. Cushman & Wakefield also reported a healthy national average vacancy rate of 4.9 percent and annual rent growth of 7.8 percent.

Survey respondents remain confident about more rent growth ahead. Nearly three-fourths of respondents (74 percent) expect rents to rise in their region in the next 12 months. Although a clear majority, sentiment has pulled back slightly compared to previous surveys. Expectations for rising rents have hovered around 80 percent for the past six years.

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