The U.S. industrial real estate market entered 2026 with a “meaningful uptick” in demand, according to the latest year-end report from Cushman & Wakefield. While high interest rates and trade uncertainty persisted throughout 2025, the sector closed the year with stabilized vacancy and a surge in large-scale leasing, signaling a transition toward more balanced growth.
National net absorption reached 54.5 million square feet (msf) in the fourth quarter, a 29% increase over the same period in 2024. This late-year rally brought the full-year total to 176.8 msf, the strongest demand trend the market has seen since early 2023.
In New Jersey—one of the nation’s most pivotal logistics hubs—the market is mirroring national stabilization. According to Cushman & Wakefield’s regional data, the Garden State’s warehouse and distribution sector saw 24.7 msf of leasing activity for the year, marking its third-strongest performance since the record-breaking heights of 2021.
“Despite headwinds from the economic and geopolitical climate, New Jersey’s industrial market demonstrated resilience in 2025,” noted Andrew Judd, New Jersey Market Leader for Cushman & Wakefield. “We saw over four million square feet of leasing activity in the port region alone, underscoring the enduring demand for facilities with proximity to the Port of NY/NJ.”
While the state’s vacancy rate ticked up to 9.6% in the fourth quarter, analysts suggest the market is nearing its “vacancy peak.” This increase was largely driven by a massive wave of new construction deliveries that hit the market simultaneously rather than a lack of tenant interest.
A key theme heading into 2026 is a “flight to quality.” Occupiers are increasingly bypassing older, “commodity” warehouses in favor of Class A buildings designed for automation and advanced cold storage.
“Occupiers are prioritizing automation-ready buildings with higher power capacity,” said Jason Price, Senior Director and Americas Head of Logistics & Industrial Research. Price, who formerly oversaw the New Jersey research platform, emphasized that large users (those taking 500,000 sq. ft. or more) absorbed over 116 msf nationally in 2025.
One of the most encouraging signs for 2026 is the sharp decline in new construction starts. Nationally, developers delivered 281 msf of new space in 2025—a 35% drop from the previous year. In New Jersey, the construction pipeline has shrunk to its lowest levels since 2019, which will likely lead to positive net absorption as the current surplus of vacant space is gradually leased up.
U.S. industrial performance: 2025 vs. 2026 outlook
| Metric | 2025 Year-End Result | 2026 Forecast |
| National Vacancy | 7.1% (Stabilized) | Expected to hold steady or slightly decline |
| Annual Leasing | 665 msf (Highest since 2022) | Sustained demand from 3PLs and e-commerce |
| New Deliveries | 281 msf (Down 35% YoY) | Continued slowing of speculative starts |
| Asking Rents | $10.18 PSF (Up 1.5% YoY) | Moderate but positive growth |
Emerging trends for 2026
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Power Scarcity: Access to reliable, high-voltage power for EV fleets and automated sorting is becoming a primary site-selection factor.
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Manufacturing Resurgence: The Southeast and Central regions are seeing a boost from “near-shoring” and domestic manufacturing investments.
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Rent Moderation: While rents are up 53% over the last five years, landlords are now increasingly using concessions (such as free rent or tenant improvement packages) to maintain occupancy over aggressive rate hikes.
“With vacancy stabilized and new supply slowing, the U.S. industrial market is entering 2026 from a position of strength,” concluded Jason Tolliver, President of Logistics & Industrial Services.
