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ARTICLE · 21 FEBRUARY 2025

Logistically Speaking - Hot Sheet Week 8

In 2025, the commercial and industrial warehouse sector is undergoing a significant adjustment phase after years of rapid expansion.

GlobalInternational Law

Warehousing Space in 2025

In 2025, the commercial and industrial warehouse sector is undergoing a significant adjustment phase after years of rapid expansion. The previous wave of construction has largely been absorbed by the market, leading to a noticeable slowdown in new projects. Industrial construction starts have decreased, with only 236 million square feet of new space added in 2024, a 35% reduction from the year before. This decrease is attributed to higher interest rates affecting project financing and a recalibration in demand post the e-commerce surge. Vacancy rates are beginning to stabilize or slightly increase in some markets as supply catches up with demand. Nonetheless, the sector is shifting towards building for specific uses like manufacturing and data centers, indicating a nuanced evolution in space requirements.

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