Will 2026 Mark The Start Of A New Industrial Cycle?

Uncertainty defined the industrial sector at the start of 2025.

Rising vacancies and a thinning development pipeline set a cautious tone, while broader macroeconomic pressures added to market hesitation. As the year unfolded, some of these uncertainties began to resolve—but does that signal that 2026 could mark the beginning of a new cycle?

To explore this question, GlobeSt connected with members of Colliers’ Logistics & Transportation (L&T) Practice Group to examine the forces shaping today’s industrial market. Their insights highlight the trends influencing client decision-making, regional variations in demand, and the opportunities emerging across industrial real estate both now and in the near term.

GlobeSt.: What trends are currently shaping the industrial sector, and how are they influencing client decisions?

Mike Spears, SVP & Principal, Atlanta: Post-COVID, there was a clear trend of companies expanding inventories, which absorbed a lot of available square footage. Now, with higher interest rates, clients are evaluating the right balance between holding safety stock and managing the cost of carrying inventory. The good news is interest rates are likely to come down over the next 12 to 18 months, which may encourage more companies to take on additional space.

Greig Lagomarsino, Vice Chairman, Northern California: In Northern California, we’re seeing a notable increase in build-to-suit developments. The lack of existing buildings over one million square feet means companies must construct new facilities to meet their needs. This is largely driven by corporate consolidation and the desire to upgrade or expand operations. Importantly, this trend isn’t limited to our region—it’s happening across major industrial hubs nationwide.

Peter Danna, Vice Chairman, Dallas: One of our clients competes for contracts to supply materials from a construction standpoint, for data center growth around the country. When they win those contracts, they need warehousing and logistics facilities quickly, sometimes we’re talking about getting a location up and running in 60 days. Speed and readiness are critical.

Christopher Sheehan, Senior EVP, Greater Los Angeles: We’re also seeing corporate tenants making larger deals. In some of our Southern California markets, 200,000 to 300,000 square foot buildings are standard, but companies are now doing 400,000 to 600,000 square foot leases. These bigger moves by major players often set the pace for the rest of the market, influencing broader demand trends.

GlobeSt.: What regional differences are you seeing across North America in demand for logistics facilities or transportation hubs?

Spears: Rent growth has been tremendous, especially in regions like the West Coast and in the Northeast. That creates questions for companies about whether they need to remain in high-cost regions or if they can relocate to lower-cost markets, while keeping transportation costs in line.

Lagomarsino: In the Bay Area, demand for high-end, technology-focused buildings remains strong. Companies like Tesla, NVIDIA and Lam Research rely on local talent, so relocating isn’t an option. The concentration of expertise and industry clusters keeps these regions anchored. Meanwhile, rent adjustments in places like the Inland Empire have narrowed the cost gap between markets. Where companies once considered moving to save on rent, the advantage is less compelling now, making relocation less attractive.

Sheehan: In Southern California, some tenants explore relocation, but it’s a small percentage. The population base here is huge—around 40 million people within the region—so companies want to be close to their customers. Trying to serve that population from lower-cost markets like Phoenix, Vegas, or Reno isn’t as efficient.

Danna: Rising rents—10 to 15% escalations on renewals—are definitely impacting decisions. Clients are looking at consolidation opportunities, like combining multiple brands under one roof. Smaller facilities often carry a higher price per square foot, so consolidating can improve efficiency and cost management. Q3 data from Link Logistics shows some of the strongest rent growth occurred in markets like Atlanta, Tampa and Orlando, with year-over-year increases above 5%. And in highly competitive regions such as the Inland Empire West, bulk Class-A spaces over 700,000 square feet remain scarce and are leasing quickly. These patterns mirror the regional dynamics our teams are observing on the ground.

GlobeSt.: What are you hearing from your occupier clients and their biggest priorities in their portfolio strategy currently?

Danna: Right now, rents and escalations are the biggest concerns for our clients. Many are asking us to review their portfolios to identify locations where they might be paying above market or in a critical location without a renewal option. The goal is to restructure and or extend those leases early, in some cases securing lower rents in exchange for longer terms, which benefit both the client and the landlord.

Sheehan: Interestingly, we’re also seeing clients trying to lock in renewals ahead of anticipated market increases. Some of these leases don’t expire for 18 to 24 months, so landlords might not normally engage in early negotiations—but tenants are taking proactive steps to secure favorable terms before rents climb further.

Spears: Post-pandemic, a lot of companies were hesitant and on the sidelines. Now we’re seeing them make decisions and commitments, which is a positive shift. They’re actively evaluating portfolios and making strategic moves to grow market share and increase efficiency.

GlobeSt.: The Logistics & Transportation Group is a broker-led, collaborative network with ongoing training and annual conferences. How does this structure enhance the service you provide to clients?

Spears: Our conferences and training programs allow us to continuously improve. Collaboration across markets ensures that we can provide the best possible service, especially when working on deals in different regions. Relationships matter—if you know the broker personally, you can count on them to deliver superior service.

Sheehan: Collaboration across markets allows our clients to benefit from having a trusted source in every market, not someone they’re just referred to over a phone call. That trust translates to better service and smoother transactions.

GlobeSt.: What’s one emerging factor—technology, regulation, or infrastructure—you believe will significantly impact industrial real estate over the next five years?

Lagomarsino: Power capacity is quickly becoming a critical constraint, especially in the Bay Area. Large developments increasingly depend on securing sufficient electricity, and delays in power availability can significantly impact project timelines.

Sheehan: It’s challenging because in some markets, like Southern California, there’s limited ability to scale power for new developments. We don’t have the same data center demand as the Bay Area, but capacity for power is critical.Danna: On the portfolio side, AI is already transforming how we manage leases. Tasks like lease abstraction can be accomplished in a fraction of the time, and this speeds up account transitions dramatically—for example, a process that normally takes 90 days can now be done in 45. And as AI improves, these efficiencies will only increase, giving clients faster insights and more flexibility in decision-making

GlobeSt.: What do you see as the biggest opportunity for clients in logistics and transportation real estate in the next 12–18 months?

Danna: One major opportunity is preparing facilities for future automation. As companies plan to integrate more automated processes, they need spaces with the infrastructure to support it—like higher electrical capacity and advanced power systems. Facilities that are ready for automation will be highly desirable.

Spears: Clients want to avoid relocating once they commit to a location. State-of-the-art, automation-ready, power-sufficient facilities and an abundant labor pool help future-proof operations, reducing risk and enabling growth.

Lagomarsino: The next 12 to 18 months are all about preparing for the future. Companies that invest in infrastructure and automation-readiness now will gain a competitive edge and greater flexibility to expand their operations as demand grows.

Source: GlobeSt