This isn’t a down market—it’s a segmented one. Winners and losers will be determined by location, asset size, and tenant mix. The days of broad industrial growth are over; 2025 will reward precise, data-driven strategy.
Leasing demand is shifting. Retailers are scaling back, while 3PLs and manufacturers remain dominant, driving 33% of all new leasing activity.
Vacancy rates are highly stratified. Markets like Phoenix (15.0%) and Las Vegas (10.7%) face high vacancies, while Los Angeles (6.6%) and Inland Empire (8.7%) are stabilizing.
Mid-sized spaces (200-500k SF) are struggling. Inland Empire is particularly soft in this size range, while smaller and larger assets remain in demand.
Sublease turnover is accelerating. Major logistics and e-commerce firms, including Wayfair and HanesBrands, are snapping up available space, with large subleases turning over in 11 months on average.
