Industrial Transactions Slow as Sale Prices Slip from Record
By Kristen Smithberg | GlobeST | August 04, 2025
Industrial transactions in the United States totaled $27.6 billion during the first half of the year, with properties trading at an average of $130 per square foot, according to Yardi Matrix’s latest national industrial report. Although Southern California has seen strong recent demand, sale prices in the region—including the Inland Empire, Orange County and Los Angeles—have started to recede from record highs. The report notes that while tariffs and declining port traffic may continue to apply some downward pressure on sale prices in the coming years, further significant price reductions are not anticipated.
"Demand in the region may soften, but the ports will remain crucial to the nation’s commerce," Yardi Matrix stated.
Despite this robust economic activity, the national industrial vacancy rate climbed to a high-water mark in June, reaching 9%. This increase reflects normalized demand and slowing absorption following the delivery of more than two billion square feet of new space between 2020 and 2024. Many firms, particularly in logistics and retail, are choosing to optimize existing supply chains and delay leasing decisions amid ongoing uncertainty over tariffs.
Nevertheless, several long-term drivers continue to underpin the industrial sector. These include reshoring and nearshoring of manufacturing, the ongoing expansion of data centers, and a persistent shift toward e-commerce and omnichannel retail. Yet the pace of new supply may moderate in response to mounting challenges. In addition, new tax legislation could alter development dynamics: a reduction in tax credits for electric vehicles included in the One Big Beautiful Bill Act may affect the Battery Belt—an area stretching from Georgia to Michigan, home to numerous electric vehicle battery plants. The report cautions that it will take time for the full effects of the new tax law to be felt, but some projects may become financially untenable without the incentives.
Amid these changes, national in-place rent for industrial space averaged $8.60 per square foot in June—rising six cents from May and marking a 6.2% increase year-over-year. Coastal port markets and Sun Belt logistics hubs with significant population growth led the nation in rent growth. Miami saw rents rise 9.4% year-over-year, while Atlanta—a major Southeast hub for third-party logistics providers—recorded an 8.5% increase.
Industrial construction remains active, with more than 341 million square feet of space underway nationwide, representing 1.7% of total stock. Nearly 147 million square feet have already been completed this year. Yet developers in Southern California, in particular, face significant barriers to entry, including local opposition, land scarcity and stricter regulations that introduce new building standards and restrict truck routes, all of which could slow the pace of new construction, the report noted.
Southern Cal Emerges as Key Data Center Hub
By Richard Berger | September 08, 2025 | GlobeST
The lack of available power in the US, record low data center vacancies across the US and the region's position as the entertainment capital are driving Southern California’s Data Center resurgence, according to JLL.
“[Entertainment] is creating significant demand for streaming and content creation, edge computing and low-latency services, and major cloud providers expanding for local demand to service the 23 million+ people in the region,” Darren Eades, managing director at the brokerage, said.
That, combined with the area's role as an international gateway for trans-Pacific connectivity to APAC and a telecom fiber hub at One Wilshire, makes it a strategic location.
After a period of stagnation, Los Angeles – with its 305-megawatt (MW) of operational capacity set – is to double if the planned pipeline is approved, according to Cushman & Wakefield’s 2025 Global Data Center Market Comparison.
The timing of approvals depends on a variety of factors, including decisions from planning and permitting authorities or announcements from developers, John McWilliams, head of data center insights, Cushman & Wakefield, told GlobeSt.com.
“These variables make it difficult to predict when approvals will be finalized,” he said. “However, the resurgence of data centers in this area reflects the growing demand for infrastructure in a market that offers both strategic advantages and the capacity to support large-scale projects.”
El Segundo and Vernon continue to be a focus for new data center development, with several projects in the pipeline, such as one in Monterey Park set to begin this year.
“Vernon became a focal point for data centers after JLL worked with Prime Data Centers to plant their flag in the City,” Eades noted.
“Vernon has cheaper power due to its own generation plant and has realized the major benefits to the City of attracting data centers. Since Prime, three other data centers are under construction and in planning stages. This should, however, tap the City of power, thus forcing operators to look elsewhere for opportunities.”
McWilliams talked more in-depth about the city, touting its proximity to downtown LA, density, industrial zoning and power costs.
“Additionally, Vernon’s municipal utility provides reliable power, and the city’s ability to operate somewhat independently allows for streamlined permitting and site development processes, which are key advantages in a competitive market," he said.
Currently, there are 64 operational data centers in the LA market, with 48MW under construction that is expected to come online within the next three years, according to McWilliams.
“While there are projects in the planning phase, it’s unlikely they will progress to operational status within that same timeframe due to the complexities of the development process,” he said.
Prologis Report Signals End of Globalization Era for Supply
By Kristen Smithberg | September 30, 2025 | GlobeST
The global supply chain is undergoing a transition driven by prioritization of AI-based decision making, regional self-sufficiency and energy resilience, according to Prologis’ 2026 supply chain outlook.
The majority of global business leaders surveyed by Prologis expressed optimism about 2026 supply chain performance, but many are implementing changes to address potential risks. More than half said they have deployed new technology or installed risk monitoring systems and nearly half said they have increased safety stock in response to recent disruptions.
A new emphasis on localized production is aligning the supply chain around major cities and moving operations closer to end markets, a departure from the historical strategy of chasing the cheapest global labor. About 58% of business leaders said they expect more local supply chains by 2030, and more than three-quarters indicated they are already implementing regional self-sufficient networks. Only 31% said they expect continued globalization.
“This represents a fundamental shift from cost-optimization to risk-mitigation as the primary business strategy,” said Prologis.
“Organizations must prepare for a post-globalization era where proximity and control outweigh traditional cost advantages. Strategic planning must account for higher operational costs offset by reduced risk exposure and improved operational reliability, marking the end of the globalization era in supply chain design.”
Seventy percent of organizations worldwide said they have implemented transformational or advanced AI, and by 2030, business leaders expect AI to drive the majority of supply chain decisions across all major functions, according to the report. About one-quarter of leaders surveyed said they have already achieved AI-driven decision-making as a standard. As such, AI was the top investment priority among business leaders, with three-quarters saying it is their most important priority, followed by supplier relationships, automation and energy efficiency.
“The gap between AI leaders and laggards will widen rapidly, making immediate strategic commitment to AI implementation essential for long-term competitiveness,” Prologis said.
Energy disruptions are a major concern for business leaders, with 89% saying they have experienced this in the past year. Eighty-three percent said energy reliability is likely to be the next major supply chain crisis, especially as power requirements are expected to increase up to 50% over the next five years, largely driven by AI power demands.
Energy efficiency now outranks labor costs and tariffs as the top driver of location decisions. Nearly all business leaders surveyed said they are willing to pay premium prices for reliable energy infrastructure. About 80% of those surveyed said they would relocate once logistics costs increase 16% or more, and a similar percentage said they’d do the same after one to five major power outages per year.
“Companies need comprehensive energy strategies that address both current vulnerabilities and future capacity requirements, making energy infrastructure a core competency rather than a supporting function,” said Prologis.
