Available industrial sublease space in the U.S. hit a record high of 156M SF in the fourth quarter, according to Savills data reported by The Wall Street Journal.

The total has increased threefold in two years, and although it represents a relatively small slice of the industrial market, it is another indicator of softening demand in that sector.

In early 2020, about 92.6M SF of industrial space was available for sublease, Savills reported. That dropped to about 50M SF by the end of 2021, but since Q3 2022, the total available sublease space has grown consistently.

The industrial market is still among the healthiest segments of commercial real estate, but with a return to life more closely resembling the pre-pandemic era, American consumers are shopping online less. The effects of inflation are also pinching pocketbooks, leaving less discretionary spending.

Net absorption of industrial space came in at 48.5M SF in Q4, Savills reported, well off its Q4 2021 peak when net absorption was nearly 180M SF nationwide.

Last year, about 640M SF of industrial product delivered, also a record. Most of that was in spec projects, Savills reported. Nationwide, industrial vacancy reached 6%, or roughly a return to pre-pandemic levels. In 2022, the rate was closer to 4%.

In the current climate, warehouse users are consolidating into newer buildings, leaving more space on the market, the WSJ reported.

“If you’ve got three different facilities or four different facilities and your real estate costs are high, if you’re coming up on renewal, it might make sense to go down from four to three in a more efficient facility,” JLL Global Head of Industrial Research Mehtab Randhawa told the WSJ.