- Industrial deals between $5M–$25M totaled $5.89B in Q2, outpacing larger transactions.
- The industrial sector captured 24% of all CRE sales in H1 2025, second only to multifamily.
- Amazon and e-commerce continue to drive warehouse demand despite new tariff-related slowdowns.
- Markets like Milwaukee and Central New Jersey posted the biggest year-over-year sales gains.
Smaller Deals, Bigger Impact
While high-value industrial transactions slowed in Q2 2025, smaller deals kept the sector on track, reports GlobeSt. Industrial assets priced between $5M and $25M racked up $5.89B in sales for the quarter, according to Green Street Advisors. That momentum helped industrial capture 24% of total commercial real estate investment in the first half of 2025 — second only to multifamily at 26%.
That’s well ahead of retail (21%), office (18%), and hotels (8%), underscoring the resilience of industrial real estate even as broader CRE activity has moderated.
Tariff Fallout Hits Larger Deals
Green Street noted that investment in larger industrial properties slowed in Q2. The decline followed the implementation of tariffs by the Trump administration in April. The policy shift has introduced new uncertainty into the logistics and import-dependent sectors — a key concern for institutional investors.
Despite that, e-commerce remains a steady driver. Amazon alone is expected to account for more than half of the net industrial leasing activity in the top 50 US metro areas this year. Green Street believes total transaction volume would likely have been stronger without the tariff drag.
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Market Breakdown
Top metros by industrial sales in H1 2025 showed mixed performance:
- Los Angeles: $517.6M (▼10.3%)
- Chicago: $421M (▲6.7%)
- Philadelphia: $367.4M (▼1.8%)
- Boston: $362.6M (▲8.5%)
- Minneapolis: $336.1M (▲37.7%)
- Phoenix: $307M
- Northern New Jersey: $276.6M
- Orange County: $273.8M
- New York City: $265.9M
- Dallas-Fort Worth: $264.9M
Emerging or outperforming markets include:
- Milwaukee: $161.2M (▲83%)
- Central New Jersey: $178.8M (▲57.3%)
- Miami: $204.5M (▲17.6%)
- Houston: $206.1M (▲11.9%)
The Inland Empire saw one of the steepest declines, down 36.7% to $245.1M.
Outlook: E-Commerce Drives, But Automation Cools Demand
Looking ahead, Green Street forecasts that e-commerce will drive about 25% of incremental warehouse demand by 2026. But this growth will be offset by gains in automation and slower economic expansion — which could reduce warehouse demand by about 5% per year for each dollar of e-commerce sales.
Even so, smaller industrial assets are likely to remain a key segment for investors searching for yield and stability in a choppy market.
Why It Matters
As institutional capital pulls back from larger transactions due to market uncertainty, smaller industrial assets are emerging as a resilient and attractive alternative. Their relative affordability and consistent demand make them a liquid entry point for investors, helping to keep the industrial sector firmly in focus despite broader market challenges.
