Warehouse real estate is rebalancing. Here’s what to watch for

A large industrial warehouse features rows of shelves stacked with packages, while two workers in safety gear are walking and inspecting the storage. Utilized space exemplifies efficiency and systematic inventory management.

Witthaya Prasongsin | Moment | Getty Images

A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.

After a pandemic-driven surge, and a subsequent pullback, warehouse real estate supply and demand is finally starting to come into balance and showing new signs of life. 

E-commerce, which was the primary driver of the recent boom cycle, certainly hasn’t gone away, but more people are returning to brick and mortar. Warehouse tenants are now more focused on efficiency, power and location than they are on square footage. 

New development has slowed down, and federal policies are pushing onshoring of manufacturing, which helps the sector counter still-high interest rates and economic uncertainty. Rent increases are no longer as steep as they were a few years ago, and in some markets they are actually falling slightly due to oversupply.

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“Industrial property rents are showing signs of stabilization, indicating a more balanced market environment,” said Judy Guarino, managing director of commercial mortgage lending at JPMorgan Chase, in a note to investors.

Here’s what to watch for in warehouses in 2026. 

Big-box

Vacancies are close to cyclical peaks and new construction is contracting, according to industry data. In the first half of this year, new supply still outpaced new demand, but the gap shrank, according to new research from Colliers. Third-party logistics firms, including delivery services such as Ryder and DHL moving goods on behalf of a client, are leading that demand.

“The third-quarter demand has far exceeded the entire first half of the year, which is another really strong indicator that the supply and demand is starting to get more into a balanced state,” said Stephanie Rodriguez, national director of industrial services at Colliers. 

Across the 20 largest markets, the overall big-box vacancy rate rose 19 basis points to 11% during the first half of the year, according to Colliers. New supply totaled 48 million square feet in the first half of 2025, much less than the 330 million square feet completed at the height of the cycle in 2023. Rents are expected to stabilize in the near term before starting to grow again. 

Big-box is a major segment of the overall warehouse real estate market, particularly driven by demand from online retailers and companies seeking efficient supply chain operations. Recent economic and tariff policies have definitely shaken that demand, but as those policies settle, more demand could return. Lower interest rates would be another driver. 

Supply chain

E-commerce companies will make up nearly 25% of new leasing next year as the proportion of goods sold online rises to almost 20% globally by year-end.The need for power-ready logistics facilities capable of supporting automation and manufacturing will be a top-three factor globally in location selection.Defense-related demand in the U.S. and Europe will breathe new life into older industrial corridors and produce a new class of specialized logistics assets.Shrinking trucking capacity will drive double-digit rate hikes in 2026, making transportation an even larger share of total supply chain spend and amplifying the value of well-located logistics real estate.Power

Reshoring

“Despite the volatility in the macroeconomic landscape, driven by interest rate and trade policy uncertainties, industrial properties near ports remain vital,” Guarino said. “Tariffs may lead to higher costs and supply chain challenges, but these locations are key to maintaining supply chain resilience and adapting to trade shifts.”

Proximity

One example of the proximity advantage: Amazon. Its logistics real estate strategy mirrors a broader national trend, prioritizing efficiency, automation and consumer proximity over sheer scale, according to a note from CoStar.

“It’s an interesting inflection point for industrial developers and REITs that rode the pandemic-era boom,” wrote Juan Arias, CoStar Group’s national director of industrial analytics. 

Arias highlighted a leasing slowdown, noting that this year Amazon has occupied just 61 logistics properties, down from 100 in 2024 and as many as 300 in recent years. Its demand for larger footprint facilities hit a seven-year low, but it is still drawn to newer, taller buildings, with an emphasis on modern, efficient distribution centers, Arias said.

AI

As with everything else, artificial intelligence and property technology are making an imprint on the warehouse sector as well. They are helping owners and operators to analyze supply chains, traffic patterns and data more efficiently — particularly important in identifying potential warehouse locations. They are also helping to manage inventory and predict maintenance needs, both of which reduce costs.