- The North American big-box industrial market stabilized in the first half of 2025, with vacancy rates reaching 11% and net absorption hitting 41.3M SF, indicating a new phase of balanced supply and demand.
- Construction starts have sharply declined, with 112.4M SF under construction—down 67% from the 2022 peak—while rents have softened slightly, now averaging $8.55 PSF.
- Major markets like Dallas-Fort Worth, Chicago, and Phoenix posted strong net absorption, while Atlanta experienced a rare contraction, signaling a market recalibration as users right-size their space requirements.
Industrial Equilibrium Arrives
The North American big-box sector is entering post-pandemic normalization for warehouses and distribution centers over 200K SF. Vacancy rates stabilized near 11%, signaling absorption of oversupply from the 2021–2023 development surge, reports Colliers. Net absorption in 1H 2025 totaled 41.3M SF, with new supply close behind at 47.6M SF.
Construction Cools Sharply
Development pipelines have shrunk significantly. At mid-2025, just 112.4M SF of space is under construction—down from a peak of 367M SF in 2022. The pullback is visible across all size segments, with the 750K+ SF category seeing the most notable decline.
Meanwhile, average big-box NNN rents fell 3.4% YoY to $8.55/SF, after years of double-digit gains. Colliers expects rates to stabilize in the near term.
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Mixed Regional Performance
While some markets showed signs of renewed strength, others struggled with excess supply and tenant downsizing.
- Dallas-Fort Worth led all markets with 10M SF of net absorption, reinforcing its dominance as a logistics hub.
- Chicago rebounded after a slow start, recording 3M SF of net absorption, with demand driven by several large leases including a combined 2.1M SF by RJW Logistics.
- Phoenix saw a 76% increase in absorption amid declining vacancy.
- In contrast, Atlanta posted -1.2M SF in net absorption—the first negative print this cycle—as 3PLs and consumer brands reassessed their space post-COVID.
- Charlotte experienced steady recovery with 2M SF of absorption, while Cincinnati and Columbus benefitted from rising manufacturing and logistics demand.
Why It Matters
Big-box industrial properties have become central to logistics, manufacturing, and e-commerce strategies. With rising demand for resilient supply chains and proximity to growing population centers, the sector remains a long-term growth story. Braking construction and stabilizing rents suggest a healthier path forward for developers, investors, and occupiers alike.
What’s Next
With vacancy near its cyclical peak and speculative development in retreat, leasing activity is expected to rebound as corporate decision-making returns. Colliers forecasts a return to long-term demand averages and a potential new cycle of development beginning in late 2025 or 2026.
