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Insight

U.S. Industrial Market Dynamics, Q2 2025

Industrial landscape adapts to complex tariff and trade environment balancing challenges with signs of underlying stability

Risk management

Project Management

Industrial and logistics

Business and professional services

Authors

MR

Mehtab Randhawa

Global Head of Industrial Research

EH

Elizabeth Holder

KN

Kelsey Nastasi

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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