Last year marked a period of transition for U.S. industrial real estate, shaped by the lingering effects of the 2022–2023 supply surge and evolving trade policies, according to CommercialCafe.
While some sectors faced headwinds, others performed strongly. Data centers stood out, attracting billions for large-scale facilities supporting generative AI, while investor interest in outdoor storage grew as a low-cost solution for supply chain gaps.
National in-place rents reached $8.76 per square foot in December, up 5.7% year-over-year. Atlanta led major markets with nearly 10% growth, surpassing Miami at 8.6%. Houston, which expanded its industrial stock by 20% over the past five years, posted 5.5% rent growth and a 6.2% vacancy rate. Overall, rent growth has stabilized as new deliveries are absorbed.
New leases averaged $10.07 per square foot, a $1.31 premium over in-place rents, down from $2.14 last November. Nationally, vacancy rates ended November at 9.7%, up 220 basis points year-over-year.
As of December, 382.7 million square feet of industrial space was under construction, with 265.7 million square feet completed through November and 258 million square feet in 2025 construction starts. Indianapolis benefited from logistics demand, adding 73 million square feet between 2020 and 2023, representing a 19% market expansion thanks to its central location and access to infrastructure.
Regionally, the West saw stagnant or declining prices in Southern California, including Los Angeles (-4.3%), the Inland Empire (-13.2%), and the Central Valley (-15.9%). The Midwest remains highly affordable, with Cleveland as the lowest-priced major market. In the South, Charlotte and Memphis saw modest rent growth (4.5% and 4.1%) but widening vacancies, reflecting tenant-favored conditions. In the Northeast, Boston ($3.70) and Bridgeport ($4.40) reported some of the widest lease spreads nationally.
Year-to-date sales totaled $68.4 billion, making 2025 the strongest year since 2022, with every quarter surpassing its 2023 counterpart. Top markets include Dallas ($5.3 billion), Detroit ($4.7 billion), Phoenix ($3.2 billion), New Jersey ($2.8 billion) and Houston ($2.7 billion). Falling interest rates and long-term demand drivers have supported valuations despite oversupply and tariffs, according to CommercialCafe.
Warehouse employment continues to decline despite strong demand in logistics. Since peaking in March 2022, the sector has shed over 120,000 jobs. By November 2025, employment stood at just over 1.8 million, a four-year low, down 1.5% from last year. Automation and robotics have helped maintain productivity amid this decline, the report said.
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