More than half of the world’s logistics and industrial markets are currently experiencing a tenant-friendly environment, according to Cushman & Wakefield’s latest Waypoint global logistics and industrial report. Of the 127 individual markets analyzed, 52 percent now offer conditions more favorable to tenants, giving occupiers greater leverage in lease negotiations compared to landlords. Landlords hold the upper hand in just 24 percent of markets, with the remaining 23 percent considered neutral.
This tenant-friendly trend is unfolding against a backdrop of significant change in the global industrial real estate sector. In the United States, vacancy rates have climbed to about 7.8 percent, marking the highest level in over a decade. This increase follows a period of unprecedented speculative construction that outpaced the normalization of demand in the wake of the pandemic. Nationally, vacancy rates rose to 7.5 percent by late 2024, a sharp contrast to the sub-2 percent levels seen during the sector’s recent boom years. Globally, logistics rents recorded their first decline in more than 10 years, dropping by 5 percent in 2024, with the U.S. and Canada seeing a 7 percent decrease and Europe a 1 percent dip. However, rent growth remains positive in certain regions, such as Miami, where prices surged by over 11 percent year-over-year, while the Midwest experienced more modest increases.
That comes as the supply pipeline is undergoing a dramatic shift. The pace of new construction has slowed considerably due to higher interest rates and tighter lending conditions. In the United States, only 330.7 million square feet of new industrial space was delivered by November 2024, less than half of the annual totals seen in 2022 and 2023. Looking ahead, completions are expected to hit a 10-year low by late 2025. This slowdown is expected to have a profound impact on market dynamics over the next several years.
Recommended For You
Despite the current tenant-friendly conditions, Cushman & Wakefield projects a sharp reversal by 2028. The proportion of tenant-friendly markets is expected to fall to just 28 percent, while landlord-friendly conditions are forecast to prevail in 35 percent of markets. This shift will be driven by constrained supply, robust demand, and rising costs—all factors likely to spur renewed rent growth. The report estimates that 54 percent of the 127 markets studied should see rents rise through the end of 2027.
Demand for logistics and industrial space continues to be shaped by powerful structural forces. E-commerce remains a major driver, with companies like Amazon ramping up leasing activity and adding thousands of new warehouse jobs in 2024 alone. There is also a pronounced “flight to quality” among tenants, who are increasingly prioritizing high-specification, ESG-compliant and people-focused industrial properties. As a result, premium assets are experiencing lower vacancy rates, even as oversupply and higher vacancies persist in certain Sunbelt and Midwest hubs, particularly for large distribution centers. In contrast, smaller last-mile and light-industrial facilities remain tight, with vacancy rates under 4 percent in high-growth metro areas such as Nashville and Charlotte.
Investment in the sector remains robust. The global industrial real estate market is projected to grow from $101.66 billion in 2024 to $108.6 billion in 2025, buoyed by infrastructure development, urbanization and ongoing supply chain optimization. In the United States, industrial property sales reached $54.6 billion by November 2024, with average prices rising 2.7 percent year-over-year—a sign of continued investor confidence despite economic headwinds.
“Through all of this, success for real estate stakeholders will depend on navigating the near term with clarity of vision and purpose, while positioning strategically for long-term growth, building resilience and flexibility to better position for future strength,” said Sally Bruer, head of logistics and industrial research, EMEA, at Cushman & Wakefield.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
