CHICAGO, Aug. 14, 2025 – JLL's 2025 U.S. Industrial Tenant Demand Study reveals that while occupier decision-making timelines are lengthening, demand from 3PL, logistics, and distribution companies has increased 13% year-over-year. Occupiers are exercising greater caution with long-term commitments, favoring short-term renewals as they evaluate supply chain impacts on their space requirements amid tariff uncertainties. Decision timelines have extended from 3.5 to 11 months, while companies increasing inventory holdings in anticipation of potential tariffs are further complicating real estate planning strategies. Meanwhile, manufacturing-related demand is positioned for significant growth, with its share of U.S. industrial demand projected to reach 30% by 2028.

"There's significant pent-up demand in the market. This stems from companies actively seeking modern facilities to replace aging assets while simultaneously planning consolidation strategies,” said Craig Meyer, President of Industrial Brokerage, JLL. "The decision cycles now extend to 12-14 months as executives hesitate to make substantial investments in today's uncertain economic climate, especially given the limited supply of suitable properties. Once market conditions stabilize, we expect this accumulated demand to translate into substantial activity."

JLL’s report also indicates that current market uncertainties are accelerating manufacturing demand growth. While manufacturing currently accounts for 19.2% of total industrial demand, it is projected to capture 30% of U.S. industrial demand by 2028, driven by companies establishing domestic production facilities to reduce supply chain risk.

This strategic shift underscores how reshoring and regionalization initiatives are transforming global supply chain networks, with proximity to customers becoming increasingly important. Additionally, warehouse and distribution continues to show robust performance, currently representing 80.8% of market share, highlighting the diversity of growth opportunities across the industrial sector.

The Southeast region is dominating with 24.1% of total national demand. According to the report, Atlanta and Savannah lead this powerful regional corridor, together accounting for 43% of the Southeast's activity. Meanwhile, 3PL, Logistics & Distribution providers command 16.8% of demand, making the region the U.S.’s distribution backbone.

Experiencing 27.3% year-over-year growth, the Mid-Atlantic is also emerging as a high-growth industrial market. The region offers solid intermodal networks, superior ports, and growing bulk market capabilities, while its military-enhanced workforce and established defense manufacturing sector in Virginia and Maryland position it to drive significant near-term demand.

Phoenix has emerged as the West Coast's premier reshoring hub, achieving 30.8% yearly growth, owing to exceptional infrastructure and reliable utility services. Manufacturing needs here have surged 385% since 2020, with consumer products and semiconductor firms generating 64% of its manufacturing demand.

Despite current hesitations, JLL’s analysis points to substantial accumulated industrial demand that remains sidelined but ready to enter the market. This deferred activity reflects a strategic pause rather than declining interest, as companies continue refining their facility requirements for the coming years. The measured approach to commitments suggests a market recalibration that will likely result in more sustainable, thoughtful expansion once economic conditions stabilize.

“Our data reveals substantial latent demand that’s building across multiple sectors,” says Randhawa. “The extended timeframes we’re seeing in decision-making reflect strategic evaluation rather than disinterest. Companies are carefully weighing their long-term facility needs against evolving supply chain requirements. We anticipate this accumulated demand will materialize into significant leasing activity once economic clarity emerges, particularly as suitable industrial space remains constrained in key markets.”