U.S. National Industrial Market CRE | Q2 2025 - Tampa Bay Industrial Advisors

Tampabay / August 24, 2025

U.S. National Market Report | Q2 2025

Demand for U.S. industrial space largely remained resilient in the face of higher tariffs and increased economic uncertainty. Overall net absorption exceeded expectations with a total of 29.6 msf in Q2 2025, on par with the 30.3 msf registered in the first quarter. The total was driven by the enduring trend of large corporate users’ flight to quality as more than 50 msf of warehouse space was absorbed in buildings built in more recent years. However, early signs of tariff-related impacts are emerging in select markets.

Check out the full report below presented by Cushman and Wakefield.

Highlights:

- - Industrial Supply
    - Vacancy Rate |7.1% : Vacancy edges higher. The overall vacancy rate continued to edge upwards, increasing by 20 basis points (bps) in the second quarter. The South and the Midwest regions saw their vacancy rates hold relatively firm quarter-overquarter (QOQ), ticking higher by just 10 bp
    - Under Construction |268.6M : ,New completions fell to just 71.5 msf, the lowest point since Q1 2019 (68.6 msf) amid the shrinking under-construction pipeline. The pipeline has dissipated to its lowest level (268.6 msf) since the close of 2017 and should continue to shrink throughout increased economic uncertainty, higher borrowing costs, and elevated vacancy rates or more YOY, and just five markets now boast pipelines of 10 msf or more, down from 12 markets one year prior
  - Industrial Demand
    - Net Absorption |29.6M: Net absorption in the industrial
      sector remained below its historical average in the second quarter, totaling 29.6 million square feet (msf), on par with the first quarter’s level. While growth has moderated, absorption remains steady and continues to show variation across markets, building sizes and by building class.
  - Market Pricing
    - Asking Rent | $10.12 PSF: Annual average asking rent growth decelerated to 2.6% in Q2. However, the story is more nuanced with YOY rent declines in 41% of markets and rent growth exceeding 5% in a fifth of U.S. markets. Yet, cumulative rent growth over the last five years remains strong, averaging nearly 60%, meaning that
      occupiers can still find it challenging to adjust existing leases to market.