Industrial landscape adapts to complex tariff and trade environment balancing challenges with signs of underlying stability
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U.S. Industrial Market Dynamics, Q2 2025
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- Economic headwinds, delayed occupancy, and a wave of large bankruptcies contributed to quarterly absorption reaching just 15.6 million s.f.,
- Despite muted net absorption, leasing activity improved 4.2% year-over-year and was driven primarily by 3PL leasing which accounted for 16.5% of all activity in Q2.
- Q2 deliveries reached 59.5 million s.f., which is the lowest since Q1 2019, reflecting cautious developer response to market conditions.
- The development pipeline has continued to contract to a sustainable level, with just 241 million s.f. currently under construction, the lowest figure observed since Q3 of 2016.
- The vacancy rate increased 20 basis points to 7.5%, a temporary adjustment rather than a troubling trend.
- Asking rates have continued to plateau, only nominally increasing to $10.06 per s.f. from $9.99 p.s.f. the previous quarter.
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