Q1 2025 Occupier Outlook - Industrial

The US Industrial Market Slows as Occupiers Consider Next Move

As rent growth puts on the brakes in the broader industrial market, occupiers are moving into a position of leverage. Nevertheless, due to the record rent growth during the pandemic, many leases are still renewing at higher rates after being marked to market. Vacancy has now drifted higher for eleven consecutive quarters, but with new spec development beginning to subside the vacancy increases have notably slowed. The elephant in the room is the unpredictability of rising tariffs and how this may impact the logistics and manufacturing market in the short and long-term. This uncertainty will likely result in some hesitancy in the next three to six months as companies with complex supply chains chart a path forward. Even as consumer sentiment declines, the American consumer spending continues to be strong, but this will be watched closely all sides as a predictor of future demand.

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