According to a recent Prologis report, e-commerce still required three times the logistics space of in-store sales in 2024, and this share shift alone would produce 250 to 350 million square feet of U.S. logistics space demand over the next five years.
Driven by ongoing population growth, low costs, strategic infrastructure access, and a favorable business operation environment, industrial vacancy rates remain below pre-pandemic averages, and rental rates continue to rise in key markets in the Southeast U.S.
The industrial sector led the way in investment sales, contributing $22.8 billion in the fourth quarter, a 31% increase from the prior quarter. Looking ahead to 2025, investors are expected to continue favoring industrial and e-commerce assets.
According to Newmark’s Road Work Ahead report, though overall industrial market growth correlates with infrastructure investment, and will continue to do so on a national level, not all markets will see similar levels of growth in the coming years.
According to the NAIOP Industrial Space Demand Forecast, absorption in 2025 is expected to be around 249 million square feet, and the figure in the first half of 2026 could be about 154 million square feet, assuming there is a soft landing of interest rates. If a hard landing materializes, net absorption could significantly underperform.