Demand for newer, large-format industrial properties is surging, driven by corporate occupiers and third-party logistics providers (3PLs), according to Cushman & Wakefield's latest large-format industrial report. Net absorption in the second half of 2025 was led by warehouses and logistics facilities delivered since 2020, marking the strongest activity in more than a decade after a slowdown in 2023–2024, the report said.
Deals exceeding 500,000 square feet jumped 32% year-over-year, with 63% of activity attributed to 3PLs and manufacturing tenants. This reflects ongoing supply chain adjustments amid elevated real estate costs and moderating consumer demand. In total, 113 million square feet of net absorption occurred in these larger, newer properties, accounting for 64% of nationwide year-to-date absorption.
A key factor is a flight to quality, as tenants consolidate from older, smaller warehouses into Class A facilities with higher clear heights and sufficient power for automation and robotics.
Build-to-suit (BTS) strategies have gained prominence, allowing tenants to tailor operational footprints. Nationwide, BTS development rose 11% last year, with 19% of leased space in deals over 500,000 square feet tied to BTS projects. BTS projects of 500,000 square feet or larger underway increased 14% year-over-year, the highest level since early 2024, making them a major contributor to net absorption heading into 2026.
Of the 104 large leases executed in 2025, 71% occurred in markets priced below the national average of $10.18 per square foot and 63% were in areas 20% or more below the average. Many tenants are shifting demand toward inland markets, away from higher-priced coastal regions, where rents can exceed the national average by 10% to 65%, the report said.
Vacancy rates for large warehouses fell 140 basis points year-over-year. User-purchase volume hit 36.7 million square feet in 2025, the highest level this decade and 68% higher than 2024, as limited speculative space pushes major retailers, 3PLs and e-commerce firms to acquire properties outright.
Reaccelerating demand and a development pipeline near an eight-year low are expected to support occupancy gains and future rent growth, particularly for high-quality industrial assets. Developers in strong-demand markets are already breaking ground on new big-box facilities, while investor interest in well-located, modern warehouses continues to climb, Cushman & Wakefield said.
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