After a period of market uncertainty, logistics is entering a sustained growth phase. Cushman & Wakefield’s latest research shows industrial real estate stabilizing, with vacancy rates peaking and absorption improving across key markets.
Industrial Market Trends: A Look at the Numbers
Industrial vacancy rates are nearing their peak, with the national average at 6.7%—still below the 10-year pre-pandemic norm. While new leasing activity has slowed, absorption is on the rise. In Q4 alone, the market absorbed 36.8 million square feet, up from 33.3 million square feet in Q3. However, total annual absorption declined 20% year-over-year, reflecting the broader economic cooldown.
New leasing activity in Q4 held steady at 130 million square feet, marking a 15.7% decline from the previous year. Even with this dip, 2024 still ranked as the sixth strongest year on record for industrial leasing.
Key Markets Driving Growth
Certain regions continue to dominate industrial leasing and development. Dallas/Fort Worth and the Inland Empire each recorded over 45 million square feet of leasing activity, reinforcing their roles as national logistics hubs. Meanwhile, the Southern and Western markets accounted for 79% of total industrial deliveries, signaling ongoing expansion in these regions.
What’s Fueling the Growth?
Several key trends are driving momentum in the industrial sector. Companies are securing larger spaces to support e-commerce, wholesale, and retail inventory management, fueling the rise of omnichannel fulfillment. Many businesses are adopting forward-deployed stock models, strategically positioning inventory closer to consumers to reduce delivery times and enhance customer satisfaction.
Retailers, wholesalers, and 3PLs are also prioritizing supply chain optimization, diversifying their networks to mitigate risks. According to Cushman & Wakefield, companies are no longer just reacting to market shifts—they’re actively shaping logistics strategies to improve efficiency and ensure long-term stability.
Looking Ahead: 2025 and Beyond
With new industrial construction slowing for the second consecutive quarter and demand stabilizing, rental rates continue to rise. Asking rents increased 4.5% year-over-year, signaling that landlords will maintain pricing power in high-demand regions.
As logistics enters its next growth phase, companies investing in industrial real estate and supply chain optimization will be best positioned to capitalize on market trends.
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