Analysis
The figures contained herein focus on existing, or currently under construction, industrial buildings including warehouse, flex, commercial and small shop properties. Non-competitive, owner-occupied, special-purpose manufacturing buildings do not accurately affect local vacancy or rental rates and are therefore excluded from this analysis.
Market Overview
The Cedar Rapids industrial market consists of approx. 13,200,000 square feet (SF). Entering 2023, the vacancy rate was 1.20% which increased steadily as new construction options came online. Several larger sales/leases took place during the fourth quarter, ultimately ending the year with a vacancy rate of 1.25%.
The average asking rental rate is $6.94/SF NNN. This figure fluctuated slightly but eventually increased after beginning the year at $6.51/SF NNN. This increase can be attributed to the cost of new construction and the continued lack of available second-generation space.
Looking Ahead
Higher interest rates and material costs contributed to the considerable slowing of new construction starts in 2023. A slight decrease in tenant demand coupled with fewer construction starts will ultimately allow the vacancy rate to begin stabilization in 2024.
Significant transactions announced, in progress, completed or traded
- 10015 6th Street SW, Cedar Rapids — Sub-Zero — began construction on a 400,000 SF manufacturing facility, $140,600,000 investment
- 1925 Blairs Ferry Road NE, Cedar Rapids — Former REXCO Property — 21,184 SF on 7 acres sold for $1,585,000 and subsequently leased to a single tenant
- 1345 76th Avenue SW, Cedar Rapids — Conveyor Engineering Expansion — 32,000 SF building expansion, $5,000,000 investment
- 999 Enterprise Drive, Marion — New Construction Multi-tenant Building — 52,300 SF building leased to Fosters Kraus and Ohio Transmission Corporation
- 9300 Earhart Lane SW, Cedar Rapids — Lil’ Drug Store Expansion — 45,000 SF addition to their existing 105,000 SF facility
- 5515 4th Street Court SW, Cedar Rapids — White Cap — 30,000 SF leased to a construction and industrial material supplier
- 2720 64th Avenue SW, Cedar Rapids — Zurcher Tire — 50,000 SF building constructed in Edgewood Industrial Park
- 76th Avenue SW, Cedar Rapids — Brown Nationalease — constructing an 11,000 SF truck and trailer leasing facility, $4,000,000 investment
- 1203 & 1204 9th St. SW, Cedar Rapids — Vacant — 55,728 SF building sold to an investor for $1,600,000
- 635 Bell Avenue. SW, Cedar Rapids — Solutions Management Group — constructing a 9,000 SF warehouse and office facility