Q3 2025 U.S. industrial market report

Net absorption turned positive in Q3 2025 after a slight dip in Q2, driven by renewed tenant confidence and greater clarity on U.S. trade policy. This rebound, supported by strong consumer spending and GDP growth, signals improving sentiment across the industrial market despite lingering economic uncertainty.

Vacancy rose only 0.1% quarter over quarter — the smallest increase of the post-COVID cycle. This slowdown points to a return to stability after a year of uncertainty around elections, trade, and fiscal policy. Confidence is building, supported by e-commerce growth and a surge in manufacturing investment expected to accelerate into 2026.

For the first time since interest rate hikes began in 2022, the share of industrial inventory under construction has increased. After nearly two years of developer pullback amid tighter financing and economic uncertainty, this modest uptick signals growing confidence, particularly in markets that avoided oversupply.

Despite trade and tariff headwinds, industrial leasing has remained resilient, tracking near pre-COVID levels through the first three quarters of 2025. The One Big Beautiful Bill Act (OBBBA) is expected to catalyze U.S. manufacturing and drive complementary industrial demand, setting the stage for accelerated growth in 2026 and beyond.

Industrial investment volume is accelerating at a record pace in 2025, positioning the year to close as the third strongest in sector history. This marks the second consecutive year of growth following the sharp decline in 2023, with momentum building for continued expansion into 2026.