The U.S. industrial real estate market showed continued resilience in the second quarter, despite broader economic uncertainty and regional volatility, according to a report from Cushman & Wakefield.
Overall, national net absorption totaled 29.6 million square feet (msf), on par with the first quarter’s 30.3 msf and exceeding expectations, with demand concentrated in newly built logistics properties, the firm said in its “Q2 U.S. industrial market report.”
The national industrial vacancy rate rose to 7.1%, up 10 basis points from the historical pre-pandemic average of 7.0%, as new product continued to outpace demand. Vacancy rates for smaller warehouses (under 100,000 sf) remained low at 4.4%, although this segment also experienced an 80-basis-point year-over-year increase.
Average asking rents rose modestly, reaching $10.12 per square foot at the end of Q2—a 0.9% increase from Q1. On an annual basis, rents grew by 2.6%, though both the Northeast (-1.5%) and West (-1.9%) regions posted year-over-year declines. Eighteen of the 83 markets tracked posted annual rent growth of 5% or more, down from 21 in the first quarter. Pricing for smaller-warehouse facilities remained elevated, averaging $13.51 psf—31% above space sized over 100,000 sf.
“Demand for logistics space remains resilient. Many companies accelerated imports to manage tariff exposure, prioritizing agility and flexibility in their supply chains. This is driving a noticeable uptick in activity beginning in June, as occupiers moved quickly during a window of lighter tariff pressure,” Jason Tolliver, President, Logistics & Industrial Americas at Cushman & Wakefield, said in a release. “Looking forward, market fundamentals are expected to strengthen, with demand gradually improving and supply falling rapidly. For tenants the next 6 to 12 months may present the best opportunity to secure favorable lease terms.”
