The headlines are saying industrial is softening. Vacancy is up across most major markets. New supply is still hitting. And yet landlords are not moving on rent.
That disconnect is real and worth understanding before you make any decision based on a headline.
What Is Actually Happening
The new supply that came online in 2023 and 2024 was heavily concentrated in larger bulk logistics boxes. Think 300,000 square feet and up. That is the segment where vacancy has climbed. Those big boxes were built fast and spec, and some of them are still sitting.
But the sub-100,000 square foot market, which is most of what we work in, is still tight. Local distributors, last-mile operators, and small manufacturers are not moving into or out of space on any kind of speculative schedule. They need what they need, and they sign when they find it.
Why Rents Are Holding
Rents are holding in the smaller bay size category because supply is genuinely limited. Most infill industrial product is old. Functional, but old. Modern clear height, dock positions, and power specs in the right locations are not easy to find.
Owners with well-located, functional product know they have something scarce. That is why they are not discounting.
What This Means for You
If you are a tenant, you are not getting the give you might expect from reading the trade press. If you are a buyer, cap rates have moved a little but not dramatically because good operators know what they own. And if you are an owner sitting on well-located product, this is not the time to feel pressured.
Watch the rate environment more than the vacancy headlines. When money gets cheaper, this market will move.