Industrial supply outpaced demand for the second straight quarter in Q4 2022, with overall absorption net absorption down 9.4% quarter over quarter and 15% over 2021′s year to date total, according to new research from Cushman & Wakefield.

Meanwhile, vacancy rose by 20 basis points to 3.3% in Q4 as speculative construction completions continue to chug along despite a lull in leasing activity. Approximately 143.6 million square feet of industrial space was completed in the fourth quarter after hitting a historic high in Q3; overall, completions were up 37% compared to YTD 2021, and almost 73% of those completions were speculative.

Construction starts did show signs of moderating in Q4 as the under-construction pipeline dipped below 700 million square feet. Eighty-three percent of that under-construction space is on a speculative basis while 21.3% has been pre-leased.