The industrial real estate market has absorbed three major shocks over the past five years — the pandemic, shifting trade policy and energy price volatility — and emerged not weakened but structurally reshaped. A new Newmark report argues that this cycle of disruption is redefining how occupiers, investors and developers measure performance, with "durability" now serving as the sector's dominant lens.
Durability, the report notes, reflects more than resilience through a single downturn. It captures how industrial fundamentals have been repeatedly stress-tested by distinct forces, from pandemic-era supply chain breakdowns to shifting global trade dynamics and energy-driven cost pressures. Rather than producing a uniform cycle, these shocks have accelerated divergence across markets and asset types, sharpening the gap between modern logistics facilities and older, less efficient inventory.
Markets with strong transportation access, dense consumption bases and newer warehouse stock continue to attract outsized demand, supporting steadier rent growth and sustained occupancy even as broader conditions have cooled. Lower-quality, less optimally located assets, by contrast, are experiencing more uneven leasing activity and greater pricing power variation.
That split is increasingly shaping decision-making across the market. Occupiers are no longer treating industrial space as interchangeable, instead prioritizing network efficiency, labor access and buildings capable of supporting automation and evolving supply chain needs. The focus has shifted from space acquisition to system optimization in an environment defined by volatility rather than stability.
Investors are adjusting, with underwriting placing greater weight on how assets function within broader logistics networks, reinforcing capital flows toward infill industrial, last-mile distribution and modern bulk facilities in established corridors. Secondary and more speculative assets are facing more selective capital allocation, the report said.
These dynamics are reflected in Newmark's "durability index," which ranks markets based on structural demand drivers including proximity to consumption, ecommerce opportunity, modal optionality, manufacturing competitiveness and availability of modern supply.
At the top of the index, New York/Northern New Jersey leads with a composite score of 116.6, followed by Chicago (114.0) and Dallas (111.7). Houston (107.6) and Southern California (107.1) round out the upper tier, each supported by entrenched logistics infrastructure and strong demand ecosystems.
These markets have translated structural advantages into consistent performance. From 2020 to 2025, high-durability markets posted steady net absorption, led by Dallas and Houston at 3.2% each. Rent growth was strongest in constrained coastal and gateway markets, including New York/Northern New Jersey at 11.2% and Southern California at 10.4%.
At the lower end of the spectrum, Newmark identifies markets such as Phoenix (101.5), Louisville (101.5), Atlanta (102.8) and Minneapolis (103.3), where structural advantages are less pronounced but demand remains active. These markets show softer scores across key logistics drivers, though still benefit from population growth and distribution expansion.
Performance in these lower-ranked markets remains mixed rather than weak. Phoenix, for example, recorded the strongest net absorption in the group at 5.2% over the period, supported by rapid in-migration and regional distribution demand. Atlanta and Eastern Pennsylvania also posted steady absorption and rent growth, underscoring that lower durability scores reflect sensitivity to cycles rather than outright underperformance.
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