The Best Cities to Buy Industrial Property in 2023

Reading Time: 8 minutes

The industrial real estate market is expected to remain strong throughout 2023, even if the country encounters economic headwinds. The most recent Emerging Trends in Real Estate report from PwC predicts that Northern New Jersey, Miami, and Los Angeles will be among the top U.S. markets for industrial investment. So if you’re looking to buy industrial property in 2023, you’ll want to focus on these cities.

Each of these markets has something unique to offer investors, such as strong population and job growth or a prime location that’s favored by businesses. No matter what your needs or goals are, there’s sure to be a market on this list that’s perfect for you. We’ll go into more detail on each of the markets below.

10 Top Cities for Investing in Industrial Property in 2023

When it comes to choosing the right city to purchase industrial property, there are a few key factors investors must consider:

  • Firstly, they must look at the city’s current and projected economic growth.
  • Secondly, they need to assess the demand for industrial space in the city.
  • Finally, they need to consider what kind of return on investment they can expect from a property in that market.

Here is a list of the top 10 cities where industrial investors should look in 2023. Commercial real estate statistics are from the Q3 2022 U.S. Industrial MarketBeat report from Cushman & Wakefield and Crexi’s internal database. Demographic information for each metropolitan area is from CensusReporter.org and DataUSA.io.

Aerial Drone of Cresskill New Jersey

1. Northern New Jersey

Northern New Jersey is known for its proximity to major metropolitan areas like New York City and Philadelphia. With a population of over 948,000, Bergen County, located across the Hudson River from Manhattan, is the most populated county in Northern New Jersey. The area has seen a significant demand for industrial space in recent years, which has caused industrial rents to increase by nearly 40% year-over-year.

The Northern New Jersey market is home to over 291 million square feet of industrial space. Tenants have leased more than 1.5 million feet of industrial space this year, driving industrial vacancy in Northern New Jersey down to just 2.2%. Developers are striving to meet the growing market demand for manufacturing, warehouse, and distribution space, with about 4 million SF currently under construction. Per Crexi data, in the last year, the median sold price per square foot for industrial property in New Jersey rose from $132 to $151.

Downtown of the city of Miami

2. Miami

Miami is a major gateway city in the United States, and the metropolitan area is a leader in finance, commerce, culture, media, entertainment, the arts, and international trade. The city has a rapidly growing population and a strong economy with diversified industries, including tourism, manufacturing, logistics, health care, film and television production, and agriculture. The Port of Miami is one of the country’s largest cargo ports and the world’s largest passenger port. The Miami metro area is also home to several airports.

Miami’s industrial market has been doing well in recent years and is expected to keep improving. On Crexi, median closed prices per square foot have jumped from $175 in 2021 to $218 year-to-date. The vacancy rate is low at 1.8%, with leases signed for over 2.5 million square feet of space to date this year. Overall average asking rents are relatively low at $11.79 per square foot, making Miami a good option for companies looking to lease industrial space.

New York City, NYC, USA
New York City, NYC, USA

3. New York City

The New York City boroughs of Brooklyn, Queens, Staten Island, and the Bronx are ranked by Emerging Trends as the third best places to invest in industrial property. These outer boroughs have become increasingly popular for industrial uses, given their proximity to New York City’s dense population centers and available land and transportation infrastructure. The area’s growing e-commerce and distribution industries have further fueled demand for industrial space.

The Greater New York City region is home to about 9.5 million workers, with steady employment and population growth. Asking prices in 2022 jumped nearly 32% year-over-year for NYC industrial space, per Crexi data. Overall, total industrial inventory is 142,720,550 SF, and the vacancy rate is 3.6%. YTD industrial leasing activity is over 1.1 million, and over 5 million SF of new construction is underway. Investors looking to develop new industrial projects in New York City’s outer boroughs will find many opportunities on Crexi.

Downtown Nashville Sunset

4. Nashville

Nashville is a top market for industrial real estate due to its strong economy and growing population. The city has a large labor force and is attracting many businesses looking to expand their operations. Industrial properties in Nashville are in high demand, with vacancy rates remaining low and rents continuing to rise.

Industrial buildings in Nashville are available for sale, with about $96M in value transacted so far in 2022. The vacancy rate for industrial properties is still competitive at a low 2.8%. Nashville’s average asking rents for industrial properties are reasonable at $6.62 per square foot, making it an affordable option for businesses expanding and relocating their operations. New industrial construction totaling 15.6 million square feet is currently underway, providing ample opportunity for investors looking to develop warehouses and distribution facilities in Nashville.

View of downtown Riverside, from Mount Rubidoux in Riverside, California

5. Inland Empire

The Inland Empire is one of the hottest industrial markets in the country and is home to several major cities, including Riverside and San Bernardino. Due to rapidly increasing demand, the vacancy rate is one of the lowest in the country, and asking rents have increased by about 20% in the past six months alone. Experts project the market to continue to grow rapidly as more and more companies are looking to move into the area to take advantage of its central location and proximity to major transportation hubs.

The Inland Empire is thriving, with a population of 4.6 million and an employment increase of 1.98 million in 2022, making it one of the most promising regions in the state. The area’s expansive industrial inventory encompasses 594,807,940 square feet, while its average industrial asking rents sit at $16 per square foot full-service gross. Additionally, the vacancy rate rests at a mere 0.5%, and absorption through Q3 2022 totals 2,481,193 square feet. Both trends indicate that this region won’t be sitting still anytime soon.

Broad Street Panorama in Charleston, South Carolina, USA.

6. Charleston

Charleston, South Carolina, is a city located in Berkeley, Charleston, and Dorchester counties in the state of South Carolina. The city’s population is 813,052, with a population growth rate of 2.12%. The city is a major port city, with a deepwater harbor that handles over $72 billion in cargo. The employment market in Charleston is strong, with an employment growth rate of 1.65%, which is about three times the national average.

In Charleston, industrial property is in high demand, with an overall vacancy rate of only 1.8% and a median sold price per square foot at $215, per Crexi data. Absorption for industrial space was 809,832 square feet through Q3 2022, and leasing activity totaled 795,665 square feet. There is currently 6,831,211 square feet of new industrial construction underway in Charleston, creating potential opportunities for investors looking for spec industrial space in metropolitan Charleston.

Aerial view of Fashion Island mall in Newport Beach, Orange County, California

7. Orange County

Orange County is located in southern California, adjacent to the Los Angeles metropolitan area. It is home to over 3 million people and is one of the fastest-growing counties in the state. Orange County has a strong economy, with a diverse range of industries represented. The county is also well-known for its tourist attractions, such as Disneyland and Knott’s Berry Farm.

When it comes to industrial real estate investing, Orange County is one of the best markets to consider with more than $2.1B in transactions completed this year. The county has a strong economy and large population, fueling favorable net absorption rates. Additionally, Orange County’s average industrial asking rents are very competitive at $18.81 per square foot per year (full-service gross). And finally, with over 3.1 million SF in new industrial leasing activity, the vacancy rate is just 1.4%.

Memphis, Tennessee, USA aerial skyline view with downtown and Mud Island.

8. Memphis

Memphis is located in the southwest corner of Tennessee and is the state’s second-largest city, with a population of over 1.3 million people. The city is known for its music and culture, as well as its food and barbecue. The Memphis metro area is home to over 619,000 jobs, with employment growth of 0.291% from 2019-2020. The city’s central location along the Mississippi River makes it ideal for distribution warehouses and facilities.

The city’s overall average asking rents for industrial property are $4.16/SF per year, full-service gross, making it an affordable option for businesses. The vacancy rate for industrial property in Memphis is 4.4%, and absorption was 3,753,414 SF through Q3 2022. Industrial leasing activity YTD was 2,961,920 SF. There is currently 11,706,578 SF of new industrial construction underway. Memphis is also home to a major FedEx hub, which drives demand for industrial space in the city.

Gorgeous sunset aerial panoramic view of the Orlando, Florida

9. Orlando

Orlando is one of the fastest-growing cities in the United States, with a thriving economy and a population expected to grow in the coming years. The city’s proximity to major highways and its international airport make it an ideal location for distribution facilities. Additionally, the city’s favorable tax policies make it an attractive option for businesses looking to expand or relocate.

Orlando’s industrial market is strong and has been growing steadily in recent years, with average asking prices up 22.8% year-over-year. The vacancy rate for industrial properties is 4.1%, and leasing activity captured 1,076,224 SF this year to date. There is 3,948,013 SF of new industrial construction underway in Orlando. Distribution facilities and warehouses are especially well-suited to the Orlando market due to the city’s central location and access to major highways.

Los Angeles downtown buildings skyline highway traffic

10. Los Angeles

Los Angeles is the second-largest city in the United States, with a population of over 13 million people. The city has a diverse economy with a strong focus on entertainment, international trade, manufacturing, and technology. Los Angeles is also one of the busiest port cities in the world, making it perfect for industrial real estate investment.

The Los Angeles industrial real estate market is exceptionally tight, with a vacancy rate of only 0.9% and new leases signed for more than 6.5 million SF year-to-date. In 2022 so far, Crexi comps data reported more than $3.5B in total transaction value. The average asking rent for industrial space in Los Angeles is $18.22 per square foot, full-service gross. Los Angeles currently has 4.8 million square feet of new industrial construction.

Get more industrial property data at your fingertips with Crexi Intelligence.

Similar Articles

Shanti Ryle
Shanti Ryle

Content Marketing Manager

Shanti leads Crexi's content marketing strategies with 7+ years of content development experience, creating everything from blog posts to award-winning podcasts. Previously, she worked on content teams at Snapchat, Weedmaps, and HopSkipDrive as well as developed copy, articles, and media for freelance publications.

Share This Article