The industrial sector began to show cracks in the third quarter, with demand waning for product as rising inflation sparked uncertainty among retail consumers, according to an analysis from Colliers.

"Despite headwinds, the U.S. industrial sector remains one of the top-performing commercial real estate property types," the report notes. "Core markets continue to see healthy occupancy gains and record development signifies the confidence both owners and occupiers have for industrial product. New development records are expected in 2023 as projects continue to break ground. However, economic uncertainty remains, and demand is expected to moderate over the next 12 months."

Demand is being driven primarily by occupiers looking to relocate or expand, but Colliers analysts say limited supply and rising rents are making some markets "cost-prohibitive" for tenants.