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Industrial Real Estate Maintained Strength Through 2022, While Office Faltered in Q4

The industrial and office sectors had very different stories in the fourth quarter of 2022 as well as throughout the year, according to two new reports from CBRE. Industrial real estate’s performance in Q4 was a continuation of its 2022 track record, while office demand turned negative in the final three months of the year. 

Net absorption for industrial increased by 2% quarter-over-quarter to 111.4 million square feet, despite the highest quarterly total of new completions on record. Annual net absorption of 506.3 million square feet was the second greatest ever, 27% lower than 2021’s record total. 

Conversely, U.S. office market fundamentals weakened in Q4 2022, CBRE said. After four consecutive quarters of positive demand, the market recorded 5.9 million square feet of negative net absorption. With occupiers returning more space to the market, the overall vacancy rate increased by 30 basis points to 17.3%.


Inside The Story


About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).