Is The Industrial Real Estate Boom Over?
•February 12, 2026
0
Why It Matters
The shift from oversupply to tighter fundamentals could restore yield growth for industrial REITs, while lingering macro‑uncertainties demand careful market selection.
Key Takeaways
- •New industrial construction fell 34% YoY, lowest since 2017
- •Pre‑leased “build‑to‑suit” projects rose to 40% of pipeline
- •Vacancy rates stabilized around 6‑7% after rapid 2022‑2025 rise
- •Leasing volume hit 941M sf in 2025, strongest since 2022
- •Rent growth rebounded, asking rates up 60bps to $10.85/sf
Summary
The video examines whether the post‑2020 industrial real‑estate surge is ending, noting that after a historic build‑out from 2020‑2023 the sector faced rising vacancies and falling rents, but recent data suggest a turnaround in late‑2025.
Construction deliveries dropped 34% YoY to 272 M sf in 2025—the lowest since 2017—and the pipeline shrank 12.7% YoY to 220 M sf, while pre‑leased “build‑to‑suit” projects climbed from 22% to 40% of new builds. Vacancy rates eased to 6.7% in Q4 2025 after spiking above 6% earlier, and leasing activity surged 12% to 941 M sf, delivering net absorption of 54.5 M sf in Q4 alone. Asking rents rose 60 bps to $10.85 per sf, marking the first quarterly increase since mid‑2024.
The presenter cites regional disparities—cities like Austin and Phoenix still see double‑digit vacancies, whereas Chicago and Detroit remain under 5%—and highlights macro risks such as volatile tariff policy, rising unemployment, and weak consumer sentiment. Conversely, AI‑driven automation and reshoring trends could boost demand, especially for last‑mile distribution hubs.
For investors, the slowdown in supply combined with stabilizing demand points to improving occupancy and rent fundamentals, but the outlook hinges on political and economic stability in 2026. Strategic focus on markets with tight supply and build‑to‑suit projects may deliver superior risk‑adjusted returns.
Original Description
Is The Industrial Real Estate Boom Over? // After one of the biggest run-ups in the history of industrial real estate from 2020 to 2023, the past few years have been tough for this sector of the business, with rising vacancy levels, falling rents, and a ton of new supply hitting the market.
But in the second half of 2025, things started to shift in this part of the industry, with the fundamentals recovering a lot in some really encouraging ways.
So in this video, we'll talk through what's happening in industrial real estate today, and what might be changing for this asset class in 2026.
💻 TRAINING & COURSES 💻
Enroll in the FREE Break Into CRE Real Estate Financial Modeling Crash Course here: https://www.breakintocre.com/free-crash-course
Enroll in any Break Into CRE course here: https://breakintocre.com/courses/
Get access to all Break Into CRE courses, all models, and additional one-on-one support with a Break Into CRE Academy membership: https://breakintocre.com/the-academy
**💰 MY FAVORITE REAL ESTATE INVESTMENT PLATFORMS 💰
EquityMultiple: https://equitymultiple.4drrzr.net/c/2975738/751081/10943
RealtyMogul: https://realtymogul.pxf.io/c/2975738/1008102/13202
🕒 Timestamps 🕒
0:00 Introduction
0:36 Construction Activity
2:38 Vacancy
3:36 Leasing Demand
5:18 Uncertainty
6:15 The Bright Side
#commercialrealestate #realestateinvesting
*Nothing in this video should be construed as tax, legal, accounting, valuation, or financial advice or recommendation. All information in this video is intended solely for educational purposes, and you are advised to consult with your own personal professional advisors regarding your personal investment decisions.
**AFFILIATE DISCLOSURE: Some of the links in this description are affiliate links, meaning, at no additional cost to you, we may earn a commission if you click through and make a purchase and/or create an account.
Research and articles referenced in this video:
0
Comments
Want to join the conversation?
Loading comments...