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. 12,700,000 square feet (SF). Entering 2022, the vacancy rate was 0.71%, it fluctuated significantly throughout the year as new construction came online and large existing spaces (Gazette facility) were sold or leased. The 2022 industrial vacancy rate ultimately ended at 1.17%.

The average asking rental rate is $6.51/SF NNN which has steadily increased since the beginning of 2022 at $6.21/SF NNN. This increase is due to the cost of new construction, continued supply chain issues and lack of available second-generation space.

Looking Ahead

Following several robust years, industrial market demand, values and rental rates should begin to level off and stabilize in 2023. Rising interest rates coupled with the potential for an economic recession will also slow the rate at which speculative new construction is being built.

2022 Industrial vacancy rates, net absorption and asking rental rates

Significant transactions announced or completed

  • 999 Enterprise Dr., MarionSpeculative Warehouse — constructing a $3,600,000 flex building for light industrial, distribution and warehousing of approx. 52,300 SF
  • 3545 3rd Ave., Marion Marion Process Solutions — 48,327 SF among 3 buildings on 3.49 acres sold as an investment for $4,625,000