The latest Industrial Business Indicator (IBI) report from Prologis reveals various challenges in the U.S. logistics market. The Q3 utilization rate is at 84.4%, below the normal range, indicating excess capacity and subdued demand despite solid GDP growth. Key insights include a 3% decline in average market rents, high vacancy rates nearing 6.8%, and a 20% drop in development starts compared to pre-pandemic levels. Prologis suggests that recovery to normal utilization levels may take two to four quarters if consumption remains steady and space returns stabilize.

Source: https://www.scmr.com/article/with-capacity-to-spare-logistics-real-estate-demand-remains-subdued