With the start of 2026, the industrial real estate sector has experienced a significant rebound, with total annual investment exceeding $100 billion as pricing begins to stabilize and the return of capital to the sector.
Improved liquidity in the debt market, a decrease in bid/ask spreads, and strong demand from logistics, manufacturing, and third-party distribution are all contributing factors in bringing investors back into the acquisition and limited development space. Transaction velocity, which began showing signs of recovery in late 2025, accelerated through January as supply levels began to return after previous overbuilding.
Capital flows and pricing reset
A clearer capital market backdrop is reshaping underwriting and deal activity. Over the past 12 months, investors allocated more than $100 billion to industrial assets nationwide, turning the page on the 2023–2024 trough and signaling one of the strongest tallies since the pandemic boom.
Average industrial cap rates, which expanded quickly during the rate‑hiking phase, are now starting to compress at the margin as financing costs improve and price discovery advances. Lenders, newly consistent on structure and proceeds for core‑plus and value‑add theses, have tightened spreads on stabilized bulk distribution in Tier‑1 logistics nodes, unlocking previously sidelined equity.
Not all assets are benefitting equally from the pricing reset. Buildings with shorter lease terms or elevated vacancy continue to face stricter credit scrutiny and wider discounts. By contrast, properties with durable tenancy, modern clear heights, and robust power draw stronger sponsorship and more competitive bidding. Forward cap‑rate guidance remains conservative, but the directional shift has widened the investable universe, particularly for well‑leased warehouses where re‑rating is under way.
Liquidity is also flowing back to the debt stack through a broader lender base. Regional banks, life companies, and debt funds are quoting with improved surety of execution, and borrowers report more predictable term sheets for acquisitions and refinancings. Expectations for modest policy easing in 2026 are supporting this thaw, even as underwriting remains disciplined on proceeds and interest‑only periods.
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Leasing fundamentals and demand drivers
Leasing metrics have steadied as new deliveries ebb and absorption re‑aligns with normalized demand. National vacancy, which moved up from post‑pandemic lows through 2024–2025, has flattened in recent quarters, with coastal and Sun Belt distribution corridors leading the improvement. E‑commerce, nearshoring‑linked manufacturing, and inventory resilience strategies continue to underpin space needs, and users are prioritizing modern specifications—40‑foot clear, generous trailer and car parking, and adequate power—to accommodate automation and reverse logistics.
Each of these factors is consistent across e-commerce businesses, manufacturers who nearshore to North America, and companies seeking inventory resiliency, with all of them focusing on buildings with modern specifications (i.e., buildings with 40-foot clear heights, generous parking for trailers and cars, and sufficient power to accommodate automation and reverse logistics).
In recent years, the increase in rents has decreased from double-digit increases during the pandemic to more reasonable mid-single-digit increases. Landlords are now providing fewer concessions—such as tenant improvement allowances and free rent—and prices for both concessions have begun to decline from their 2024 peak levels. Tenants can expect properties located in desirable locations, with little available land to build on, to continue to be very competitive price-wise; however, properties located in secondary markets must compete both on price and readiness to move into.
Occupiers continue to be methodical when it comes to expansion. Instead of pursuing massive greenfield locations, many are renewing or consolidating their rents into larger space(s) that achieve high efficiency. There continues to be a lot of build-to-suit activity for advanced manufacturing and cold storage; however, long timelines for financing and equipment are elongating delivery periods and causing many to consider phased commissioning strategies.
Take a look at our Q4 2025 market report here.
Supply pipeline and development outlook
After a burst of speculative starts in 2022–2023, the construction pipeline has reset to more sustainable levels, bolstering lease‑up prospects for projects slated to deliver in 2026–2027. Developers are recalibrating toward smaller‑bay infill projects, mission‑critical facilities, and sites with superior multimodal connectivity. Higher replacement costs and tighter underwriting are acting as circuit breakers against oversupply, particularly in metros constrained by land or power availability.
The high replacement costs and the tighter underwriting of projects have created a circuit breaker to the positive delivery of space, particularly in metropolitan areas that have limited amounts of land or power available to developers.The new product designs are reflective of how end-users of today are operating.
You can also read: Industrial real estate: Absorption rebounds as build-to-suit and owner-user deals lead
Greater ceiling heights, larger door ratios, and more flexible mezzanine spaces are becoming commonplace. If a site has access to rail or is located near a port or intermodal yard (e.g., rail and truck), it will typically command a higher price. Developers have stated the most preleasing interest that they have witnessed is for the buildings that can accommodate delivery, assembly, and returns processing without significant retrofit.
According to industry analysts, transaction volume will likely increase until mid-2026 due to improved confidence in financing rates. While capital rate projections continue to remain cautious, the gap between the buyer’s bid price and seller’s asking price has narrowed considerably for quality product types; lenders are actively entering the stabilized bulk distribution and infill logistics sectors based upon providing clearer visibility into rent rolls.
There is potential for the logistics and manufacturing sectors to experience a modest yet sustainable expansion cycle if supply remains disciplined and demand continues to grow.
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Credits: Adapted from GlobeSt’s report on February 10, 2026, which covers the surge of industrial real estate investment past $100 billion, the stabilization of pricing and cap rates, improving debt liquidity, and the implications for leasing and development.