Midwest Industrial Rents Below National Average, Miami Leads

Industrial rent growth in the Midwest is slow, with several markets—including St. Louis, Kansas City, and Detroit—reporting below-average gains.
National industrial rents rose 6.9% YoY in November, with the average rent reaching $8.27 PSF.
Miami led the nation in rent growth with an 11.1% increase, bringing rents to $12.11 PSF.
The national industrial vacancy rate reached 7.5% in November, partly due to new supply.
In markets like Miami and New Jersey, new leases are much more expensive than in-place rents, creating a growing disparity.

Key Takeaways

US industrial rents are growing across most regions, but the Midwest is lagging behind, with minimal rent growth reported in several key markets.

By The Numbers

While the national average for industrial rents rose by 6.9% YoY in November, Midwest markets like St. Louis, Kansas City, and Detroit couldn’t say the same. Meanwhile, Southern cities, particularly Miami, continue to drive the overall industrial rent surge.

Nationally, industrial rents showed strong YoY growth, with average rents climbing to $8.27 PSF in November, up from $8.24 in October.

Midwest Living

According to Yardi Matrix’s December industrial report, St. Louis posted the slowest growth, with industrial rents up by just 2.7% YoY. Kansas City, Detroit, and Minneapolis/St. Paul followed with modest gains of 3.2%, 3.6%, and 4.2%.

These cities are among the bottom eight markets for industrial rent growth, highlighting the region’s slower momentum compared to national trends.

Miami in The Lead

At the other end of the spectrum, Miami saw the biggest gains in industrial rents, spiking 11.1% to reach $12.11 PSF. The demand for industrial space in Miami is closely tied to its role as a major logistics hub and the broader regional growth in sectors like e-commerce and international trade.

Other markets in the Northeast and West Coast, including New Jersey (up 10.5%) and Inland Empire (up 10%), also saw strong rent growth, although not as dramatic as Miami.

SoCal Slowdown

Despite its historical strength, Southern California saw industrial rent growth slow down in 2024. Los Angeles, for example, saw industrial rents rise 8.1% to $15.20 PSF, a slower pace than in previous years—a fairly clear sign of a stabilizing market.

Zooming Out

Nationwide, the industrial vacancy rate rose to 7.5% in November, up 30 bps MoM. This uptick is attributed to the wave of new industrial space entering the market and a slight softening of demand as businesses adjust to changing economic conditions.

One of the report’s most notable trends is the widening gap between in-place rents and the cost of new leases.

In markets with strong demand, like Miami and New Jersey, new leases were significantly more expensive, with the spread between market average and new lease prices reaching as high as $5.86 PSF in Miami. By contrast, Midwestern markets like St. Louis saw a negative spread, where new leases were slightly cheaper than in-place rents. in the sectors that will power the future—data centers and the energy infrastructure that supports them.