The Southwest Florida unemployment rate hit 3.1%, falling 140 basis points (bps) year-over-year (YOY), on the addition of 24,341 jobs, for a job growth rate of 3.9%. In addition, industrial landlords benefited from steady employment gains in sectors that positively impacted demand. Those sectors included a 4.6% YOY increase in trade and transportation, increases in manufacturing jobs of 5.9% and an 8.1% job growth in the warehousing and utility industry. The thriving economy continued to vitalize the metro area’s industrial market as activity in development and absorption remained robust, including over 400,000 square feet (sq. ft.) of new products delivered during the first quarter and 3.6M sq. ft. under construction.
Although there was an increase in inventory over the last year of 1.7 MSF, the demand for industrial space outweighed supply, decreasing the vacancy rate to 5.6%, down 180 basis points (bps) YOY. In addition, in the first quarter, absorption trended positive for the 14th consecutive quarter to 62K sq. ft., equaling six million square feet of absorption over the past year. With heightened demand for industrial space and higher land costs and materials, rental rates increased by 7.8% YOY. These increases are forecasted to grow at 4-5% until the market supply and demand balance. With continued decreasing vacancy rates and strong positive absorption, demand across all industrial sectors will remain robust throughout 2022.