Developers nationwide are in a rush to construct new warehouses, as vacancy rates near the 1 percent mark in certain markets.

However, many are struggling to complete these projects on time due to challenges in the supply chain and a shortage of labor.

According to a recent report from Newmark, deliveries of speculative industrial warehouses exceeding 100,000 square feet saw a significant decline in 2021.

Approximately 80 million square feet of space was delivered across 23 major markets in 2021, down from roughly 110 million square feet the previous year.

The warehouses that are completed are quickly occupied, with the average time from completion to full leasing being less than three months in 2021, the report indicates.

This trend is particularly noticeable in Los Angeles, where speculative warehouses larger than 100,000 square feet are leased on average within just a few weeks of being made available. A similar pattern is observed in Southern California’s Inland Empire, which consists of San Bernardino and Riverside counties to the east of Los Angeles, currently boasting the tightest industrial market in the nation with a vacancy rate of 0.8 percent in the fourth quarter. Large warehouses in the Inland Empire typically lease within a month of becoming available.