Warehouse Demand Remains Steady
U.S. warehouse vacancies stayed at around an 11-year high in the third quarter of 2025, but for the first time in three years, didn’t expand (The Wall Street Journal, subscription).
What’s going on: “The average warehouse vacancy rate across the U.S. was 7.1% in the three months ended Sept. 30, unchanged from the second quarter, according to a report from Cushman & Wakefield … [but] the amount of warehouse space completed was down 14.6% from the previous three months at 63.6 million square feet, which is nearly 33% lower than a year earlier.”
- Demand for warehouse space surged in early 2025 as manufacturers and retailers stockpiled goods ahead of tariff implementation.
- But the market stabilized a bit in the most recent quarter, “with demand from more traditional drivers such as the manufacturing and auto sectors, and a still soft but improving housing market.”
Where it’s happening: Southern states accounted for 44% of new warehouse space built, and build-to-suit construction projects made up 31% of the spaces completed this year.
Rental prices: The national average warehouse space rent was $10.10 per square foot in the third quarter, the same as the previous quarter but up 1.7% from Q3 2024.
More variety in lessees: A broader range of companies is leasing warehouse space, according to the article, “from branded businesses to third-party logistics firms hired by retailers and others to help them navigate increasingly complex supply chains and trade policies.”