Prologis Projects Warehouse Utilization to Rise Amid E-Comme
By Kristen Smithberg | GlobeST | November 24, 2025
Warehouse utilization remains below the expansionary level of 85.5% this year but is on an upward trajectory, led by essential goods, e-commerce, and manufacturing users, according to Prologis’ Supply Chain Trends report. Wholesale and manufacturing customers frontloaded inventory in early 2025, driving utilization higher, with retailers following suit as they shifted inventories ahead of the holidays.
The report projects that customers will reach functional capacity next year if the current pace of expansion continues. This trajectory mirrors previous periods of rapid reabsorption, including 2014–2015 and 2021–2022, when utilization rebounded sharply after periods of elevated vacancy and logistics slack.
“With excess space worked out of the system, more users will return to net growth for their logistics footprints,” Prologis noted.
E-commerce companies are expected to account for roughly one-quarter of new leasing next year as online sales approach 20% of total retail worldwide by year-end. These companies are refining regional diversification strategies: Asian e-commerce players that initially entered the U.S. market through direct leases and third-party logistics partnerships are now expanding into Europe and Latin America to support cross-border fulfillment. The U.S. model is evolving as changes to de minimis import thresholds are prompting e-commerce companies to adopt blended strategies that combine onshore inventory, sea-cargo cross-docking, and faster regional fulfillment to minimize duties and streamline cross-border deliveries.
Transportation is projected to take an even larger share of total supply chain spending as trucking capacity tightens, pushing rates up by double digits next year. This trend, driven by a freight recession and new regulations, will heighten the value of well-located logistics real estate, which can shorten delivery distances, reduce transit times, and offset rising transport costs. New rules, including English-language requirements, may further reduce the number of available truckers in the U.S.
Smaller carriers are facing mounting cost pressures, with active carrier authorities falling 12% below 2022 peak levels and tender rejection volumes rising 126 basis points above 2024 levels. Spot rates have increased 4% vs. the 2024 average, with further gains expected into 2026.
Industrial Sector Still Faces Headwinds, Despite Improving N
By Lynn Giles | December 03, 2025 | GlobeST
Net absorption increased in the third quarter of 2025, however, US industrial demand remains weaker than peak years and has had a challenging time keeping pace with the supply of new buildings, according to Lee & Associates' latest market report. The commercial real estate services’ firm also found that tenant growth remained muted by lingering tariff concerns and stubborn interest rate levels. Still, some indicators point to more clarity in the sector.
“The second half of 2025 showed meaningful signs of recovery in certain important submarkets,” notes CEO, Jeff Rinkov. Third-quarter net absorption was more than 50 million square feet nationally and equaled the aggregate net absorption in the first half of 2025. “Demand is still below the peak years of 2021 and 2022, but rents are stabilizing – which is encouraging and indicates the sector is improving.”
Vacancy Rates Remain Uneven
Rinkov says that vacancy nationally is trending at approximately 7.5% and may have peaked in the third quarter. But high vacancies continue to be an issue for larger buildings in recent years, with vacancy in buildings above 100,000 square feet increasing to more than 8%. Midsize buildings have seen a more gradual rise, increasing to 5.7%. Conversely, buildings smaller than 50,000 square feet are most in demand, with vacancy typically at less than 5%.
Regionally, Rinkov says the Midwest is currently a “standout,” with vacancy rates of approximately 5.5% at the end of the third quarter. He credits the strong inland distribution and manufacturing markets that populate the region.
“Vacancy rates may be moderating because of improved demand and diminished deliveries of new inventory,” notes Rinkov. “And they still may grow slightly as we conclude the year and begin 2026. But looking forward, we believe vacancy rates will trend downward later next year.”
Landlords Face Challenging Times, Tenant Concessions
The vacancy increase has proven difficult for industrial landlords as they seek ways to attract new tenants.
The combination of tenant contraction and added supply drove up the vacancy rate 70 basis points from the second quarter to 7.5%, the highest since 2013 in the aftermath of the Great Recession. In markets where new deliveries have outpaced demand, landlords are providing richer incentive packages that include longer free rent periods, increased tenant improvement allowances and more flexibility in lease terms, especially in renewal discussions.
“Landlords have been more accommodating of tenants’ requests for short-term lease extensions as their longer-term needs have been subject to the greater uncertainty,” says Rinkov.
Investors Wait Out Tariff, Trade Uncertainty
Hovering over the industrial sector is the status of ongoing tariff and trade talks, which is being closely watched by investors.
“Tariffs and trade policy uncertainty remain consistent themes and are the main contributors to the ‘wait and see’ posture taken by many occupiers,” notes Rinkov. He adds that investors are also closely monitoring the advancement of specialty assets (including cold storage and data centers) that have outperformed the market and remain in high demand.
Rinkov says that investors are paying particular attention to policies relative to interest rates and port activity, which are data points that tend to project demand for logistics space.
“Despite the challenges facing the industrial sector, the continued resilience of the US consumer is driving the general success of the economy.”
Multifamily and Industrial Set for Vacancy Drops in 2026
By Kristen Smithberg | December 09, 2025 | GlobeST
The U.S. commercial real estate market is poised to enter 2026 with stabilizing fundamentals, stronger investor confidence and transaction volume projected to rise 15–20%. Across sectors, leasing and sales activity are gaining momentum, with pricing largely finding a floor and cap rate spreads normalizing, according to Colliers' 2026 Commercial Real Estate Outlook Report.
Multifamily remains the leader in sales volume, with occupancy expected to improve in 2026, supported by high home prices and constrained new supply. Operational efficiency and resident retention will be key amid rising costs, while selective development targets middle-market units. This sets the stage for stronger rent growth in 2027 and 2028.
Industrial space under construction has dropped 62% since 2022, nearing its cyclical low, while demand from logistics, manufacturing, data centers and R&D continues to strengthen. Net absorption is expected to exceed 220 million square feet, up 37% from 2025. Supply constraints, reshoring initiatives and policy programs like the CHIPS Act support steady growth, while rent gains remain modest between 1% to 4%.
Vacancy in the office sector is expected to fall below 18% by year-end, supported by rising demand and limited new construction. AI companies are driving leasing in key markets, while hybrid work reshapes corporate campuses with tech-enabled, adaptable and hospitality-inspired designs. New owners are repositioning underperforming assets, converting obsolete properties to mixed-use or upgraded spaces and asking rents are projected to rise between 1–2% as the markets approach balance.
Retail development remains limited due to high construction and financing costs, sustaining performance despite uneven demand. Vacancy is expected to stay steady and rents are projected to rise around 1.5%, led by Southern and Western metros. Retailers are leveraging AI and experiential formats to engage consumers, while demand is increasingly polarized between value-conscious and luxury segments.
Data centers continue to see near-historic low vacancies driven by enterprise AI adoption. However, power limitations and community opposition are limiting speculative development, while lease rates rise. Investor activity is robust, with CMBS and private capital fueling expansion, though infrastructure limits will continue to shape delivery timelines.
Healthcare is increasingly decentralized, with medical office buildings, outpatient centers and ambulatory facilities expanding closer to patient populations. Occupancy of MOBs remains high at 92.5%, and rents are rising about 2%. Integration of AI and other technologies is enhancing operational efficiency and patient experience, sustaining investor demand.
In life sciences, onshoring, AI-driven research and recovering valuations support leasing opportunities, even as vacancy remains elevated. Limited speculative construction and improving venture capital flows may drive absorption and demand for GMP facilities in 2026.
Upscale and luxury hospitality properties are outperforming, fueled by high-income travelers, while midscale and economic hotels face more price-sensitive domestic demand. Generative AI tools are influencing travel planning, with guests increasingly seeking local and unique experiences. Supply growth remains modest at 1.3% and net operating income growth is subdued.
