Q4 2025 U.S. industrial market report

The U.S. industrial market ended 2025 on a more stable footing as national vacancy held flat for two consecutive quarters, marking the first period in the post‑COVID cycle without a quarterly increase. This plateau signals improving balance between supply and demand, even as the year experienced uncertainty tied to elections, trade negotiations, and fiscal policy.  Stronger‑than‑expected demand in the second half of the year suggests the market is regaining momentum heading into 2026.

Tenant activity strengthened meaningfully, with net absorption rebounding sharply after a slight Q2 dip as delayed deals moved forward amid clearer trade policy direction. Q4 delivered the highest absorption total in the post‑COVID period, supported by resilient consumer spending and GDP performance. Further conviction in leasing activity is anticipated once the Supreme Court issues its tariff‑related ruling in early 2026.

On the supply side, the share of inventory under construction increased for the second time since 2022, reflecting a modest expansion of the pipeline after nearly two years of developer pullback. Limited availability of newly delivered vacant space is expected to push groundbreakings higher in early 2026, particularly in markets with little speculative development in recent years. Leasing volumes also surged, surpassing both 2024 totals and pre‑COVID records, fueled by renewal activity and growing manufacturing demand linked to OBBBA‑driven project announcements.

Together, these trends point to a more optimistic 2026. Stabilizing vacancy, resurging absorption, rising construction activity, and record-breaking leasing performance all signal a market moving past its post‑pandemic adjustment phase. With e‑commerce growth steady, manufacturing investment accelerating, and supply likely to remain tight in many regions, the industrial sector appears well positioned for renewed expansion in the year ahead.