The U.S. industrial real estate market continues to shift in favor of tenants as vacancy rises for the twelfth consecutive quarter. In the third quarter of 2025, national vacancy reached 7.5%, driven by new supply outpacing demand. This trend is expected to persist through early 2026 as construction completions taper off and leasing velocity remains soft.
Year-over-year rent growth has slowed to 1.3%, the lowest since 2012. Larger logistics buildings face the greatest challenges, with vacancy surpassing 10% after a 14% increase in stock over four years. In contrast, small-bay industrial space remains tight, with vacancy near pre-pandemic lows of 5%.
Looking ahead, tenants, especially large logistics users, will continue to benefit from increased leverage and landlord concessions. Smaller occupiers may face tighter options and rising competition for quality space.
National industrial real estate trends
- National industrial vacancy rose to 7.5% in Q3 2025, driven by new supply outpacing demand.
- Small-bay industrial space remains tight, with vacancy below 5% due to limited new development.
- Year-over-year rent growth slowed to 1.3%, the lowest level since 2012.
- Sublease availability is rising, and leasing velocity has declined across most regions, particularly for larger spaces.
- Quarterly net supply additions are on pace to fall below the pre-pandemic three-year average by the second half of 2025 and continue declining into 2026 when supply growth is set to hit an 11-year low.
- About 310 million square feet of industrial space is currently under construction, with Dallas–Fort Worth, Houston, and Phoenix leading the pipeline.
Download the in-depth market report to learn more
If you’d like to learn more about the nation’s industrial real estate outlook, download the full report below. This report will give you full insight into the topics mentioned above, along with a variety of other statistics to help you stay ahead of market trends.
Information contained in this report is provided, in part, from third-party sources, including the U.S. Bureau of Labor Statistics, the Bureau of Economic Analysis, Engineering News-Record, and CoStar Group. Even though obtained from sources deemed reliable, no warranty or representation, expressed or implied, is made as to the accuracy of the information herein.
