- Over half of global industrial markets now favor tenants amid rising vacancies and softening demand.
- US vacancy rates hit a decade high, while logistics rents dropped for the first time in over 10 years.
- Construction starts are falling, setting up a more landlord-friendly market by 2028.
- E-commerce and ESG trends continue to drive long-term demand and investor confidence.
Market Shift In Motion
The balance of power in the industrial real estate market is shifting, reports GlobeSt. According to Cushman & Wakefield’s latest Waypoint report, 52% of the 127 global logistics markets analyzed are now tenant-friendly—a sharp contrast to the landlord-driven conditions that dominated during the pandemic boom. In the US, vacancy rates have reached 7.8%, their highest level in more than a decade.
This change stems from a supply-demand imbalance driven by speculative construction and the post-pandemic demand reset. Developers flooded the market with space in 2022 and 2023, but only 330.7M SF were delivered in 2024, and completions are expected to hit a 10-year low by the end of 2025.
Rents Decline—But Not Everywhere
After more than a decade of growth, global industrial logistics rents fell by 5% in 2024. North America led the decline, with the US and Canada seeing a 7% drop, while Europe posted a modest 1% dip. Still, not all industrial markets are softening—Miami bucked the trend with a double-digit rent increase, while high-demand metros like Charlotte and Nashville remain tight.
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What’s Ahead
Though tenants hold the advantage today, Cushman & Wakefield forecasts a reversal within three years. By 2028, landlords will dominate 35% of markets as tenant-friendly conditions drop to just 28%. Limited new supply, strong long-term demand, and rising costs are likely to drive rent growth in 54% of markets through 2027.
Key demand drivers remain intact: e-commerce expansion, a flight to higher-spec, ESG-compliant assets, and resilient last-mile logistics needs. Premium industrial properties are holding value and maintaining low vacancy rates, while large distribution centers in the Sunbelt and Midwest face greater challenges.
Investment Remains Strong
Despite short-term headwinds, industrial real estate continues to attract capital. Global industrial real estate is set to grow from $101.66B in 2024 to $108.6B in 2025, driven by demand. In the US, industrial sales reached $54.6B last year, with prices up nearly 3% year-over-year—underscoring long-term investor confidence.
Why It Matters
The current tenant-favorable window in industrial real estate is temporary. As construction slows and demand stabilizes, landlords may regain pricing power. For industrial tenants, now is a strategic moment to secure favorable lease terms. For investors and developers, clarity, flexibility, and long-term positioning are essential to navigating the cycle and capturing the sector’s next growth phase.
