The US industrial warehouse market has shown some improvement with demand edging up by 10% but impacted by tariffs and inflationary pressures. Uncertainty has led many retailers/wholesalers to outsource distribution to third party providers, reaching 36% lease market share.
Supply chain visibility into operational costs lacks accuracy, especially in the form of real estate forecasting and market trends. Technology is now providing greater value, anticipating market pricing and the fluctuations of supply and demand. With insightful data, logistics companies can anticipate, for example, rental rate increases 1–2 years in advance. Given that pricing increased 15% year-over-year during the COVID peak, this visibility is crucial for operational planning. Similarly, many sophisticated owners now use advanced logarithms to underwrite pricing and lease rates.
Going forward, use of predictive real estate cost analytics and forecasting technologies will provide the planning savvy and visibility currently missing in the process.
As for another factor to be considered, we see AI’s pervasive impacts span across all sectors of the economy. In the real estate domain, it is most acutely felt by the proliferation of data center development. Consequently, an enormous demand for industrial land, infrastructure and, of course, electricity has created a great scarcity of resources from switch gear to transformers. A 10-year run up is expected in development, indicating long term growth, coupled with capacity constraints.
Looking to 2026, consumer demand will likely remain muted. Investment in manufacturing and data centers will stretch the industry and predictive supply chain visibility will be imperative to achieve operational success during this transitional period.