Businesswire·2026-03-11 14:00Core Insights - Large-format industrial leasing has significantly rebounded, with demand for warehouses over 500,000 square feet increasing by 32% year-over-year in the second half of 2025, indicating a strong recovery in big-box leasing activity after a slowdown in 2023 and 2024 [1][1][1] Group 1: Market Trends - The report indicates that third-party logistics providers (3PLs) and manufacturers accounted for nearly two-thirds of the large-format leasing activity, with a total of 113 million square feet of net absorption in newer, larger warehouse and logistics facilities, representing 64% of the nationwide total [1][1][1] - Companies are consolidating operations and upgrading to higher-quality facilities, leading to a "flight to quality" trend, where many occupiers are moving from smaller, outdated buildings to modern Class A facilities [1][1][1] Group 2: Development and Leasing Activity - Build-to-suit development rose by 11% in 2025, with nearly 20% of all leasing activity above 500,000 square feet tied to build-to-suit projects, which are expected to drive net absorption in 2026 [1][1][1] - Large build-to-suit projects currently underway increased by 14% year-over-year, highlighting their importance in the market [1][1][1] Group 3: Cost Sensitivity and Market Selection - Cost sensitivity is influencing market selection, with 71% of the 104 large leases signed in 2025 occurring in markets priced below the national average rent, and nearly two-thirds in markets at least 20% cheaper than the U.S. average [1][1][1] - This shift is leading to increased demand in inland and lower-cost markets, moving away from higher-priced coastal and port-adjacent locations [1][1][1] Group 4: Implications for Occupiers and Investors - Vacancy rates for large warehouses declined by 140 basis points year-over-year, while user-purchase activity reached 36.7 million square feet in 2025, the highest level of the decade [1][1][1] - The report suggests that improving occupancy and future rent growth are likely, particularly for high-quality assets, as fewer large speculative projects are in the pipeline [1][1][1] - Rising interest in well-located, modern industrial properties is supporting increased capital deployment and healthy net operating income growth, especially in key distribution markets [1][1][1] Group 5: Future Outlook - Cushman & Wakefield anticipates continued momentum in the industrial sector into 2026, particularly for newer, larger logistics facilities, driven by the resurgence of large-format leasing and accelerating build-to-suit development [1][1][1]