MARKET INTEL: Mapping the U.S. Industrial Landscape: the Most Valuable Lease and Employment Growth by State

This week, CompStak took a look at changes in the industrial employment landscape along with the most valuable industrial lease in place by state. 

Although warning signs about the economy are louder in the first few months of 2023, industrial sector employment had robust growth across many U.S. States through year-end 2022 according to the most recently released data by the Bureau of Labor Statistics. Last week’s BLS release of 2022 employment by state showed that overall annual average unemployment rates decreased in 49 states and the District of Columbia. In addition, industrial sector employment including the transportation & warehousing and manufacturing sectors rose across all but four states from December 2021 to December 2022, with the largest rates of increase achieved in Florida (5.7%) and Arizona (5.6%). According to the Bureau of Labor Statistics, the United States economy added an average of 30,000 manufacturing jobs and 23,000 transportation & warehousing jobs per month throughout 2022.

After analyzing the impressive gains in industrial sector employment by state through year-end 2022, CompStak evaluated the most valuable industrial lease currently in place in the contiguous 48 states and uncovered the following insights:

• Amazon and e-commerce dominated the most valuable deals in place by state, accounting for the single most valuable industrial lease in 12 states. The company’s lease at a multi-story New York City facility under construction is currently the most valuable in the entire country, according to CompStak’s data. 
• More than half of most valuable current leases (25/48) were signed after the beginning of the pandemic, including all 12 of Amazon’s leases that appeared on this list.
• Traditional brick-and-mortar retailers hold the most valuable current lease in the two most populous states, California (Target) and Texas (Home Depot).
• After e-commerce, traditional brick and mortar retailers hold the second-highest total of valuable leases with retailers like Big Lots and Harbor Freight Tools, also making the list.
• Three automobile-related tenants hold the most valuable spots in Southeastern states including Magna in Kentucky and South Carolina, Goodyear in Georgia, and Gestamp in Tennessee. A boom in U.S. automobile manufacturing is attracting more car parts producers and distributors to the Southeast, which is now becoming known as the electric vehicle “Battery Belt”.

ICYMI  – CompStak in the Press “How to Fill an Office Today? Waive the Rent” by Carol Ryan, WSJ

The share of lease term given to free rent has risen during the pandemic in New York City, according to CompStak’s data cited in a recent Wall Street Journal article, and is significant especially for the top deals in the market. In 2022, the free rent period accounted for 8.7% of the average term for transactions in trophy or newly  constructed  buildings in New York City, up 273 basis points from 2019 levels. For the same properties, the free rent period topped 10.7 months for transactions signed in 2022.

Want to learn more about the most valuable leases in your state? Try CompStak.