Industrial Real Estate Market Tightens as Link Logistics Reports Rising Warehouse Demand

The industrial real estate market is tightening after a multi-year correction, with warehouse availability declining nationally and new construction starts hitting a 10-year low, according to market commentary published by Link Logistics in June 2026.

Glenn Wylie, executive vice president and head of Asset Management at Link Logistics, outlined the current state of industrial real estate in an appearance on FreightWaves' "Industrial Market Pulse" program, describing a market that has moved through a full cycle — from record-breaking demand during the Covid pandemic, through a period of oversupply, and into what he characterized as a correction now favoring warehouse property owners.

What Is the Current State of Industrial Real Estate?

National availability in the industrial real estate market has been declining since Q3 2025, marking the first sustained drop since 2021, Wylie said. The construction pipeline is down 35%, with new starts at a 10-year low. Infill real estate development has become increasingly difficult to execute, further constraining new supply.

December 2025 was one of Link Logistics' highest leasing-volume months since 2021, and that momentum carried into 2026, according to the firm. The national availability rate sits at roughly 8 to 9%, though Wylie cautioned that aggregate figure masks significant divergence between property types.

"If demand continues to play through like this with the current construction pipeline, I think we'll continue to see ourselves in a favorable position from an availability standpoint," Wylie said.

Small bay infill warehouse properties — typically multi-tenant buildings under 100,000 square feet in supply-constrained urban or near-urban locations — are running at approximately 5.5 to 6% availability nationally, Wylie said. Those assets are the hardest to develop due to land scarcity and entitlement challenges, which has limited new supply and kept vacancy consistently below the national average.

Bulk distribution buildings of 500,000 square feet or more were oversupplied through mid-2025 but have since seen a sharp reversal. In Charlotte, five large-format buildings were available at the end of 2025; within 90 days, four had been either leased or purchased, Wylie said. Similar patterns played out in Atlanta, parts of the Midwest, and Texas.

Three Demand Drivers Reshaping Warehouse Real Estate

Wylie identified three primary forces driving demand for industrial and warehouse real estate.

E-commerce and last-mile delivery expectations are the first. Roughly 75% of shoppers now expect two-day delivery, Wylie said, and younger generations have grown up treating that as a baseline. Link Logistics estimates that every $1 billion in e-commerce sales generates approximately 1.2 million square feet of additional industrial demand.

Data center construction is creating a second, indirect source of warehouse demand. Companies building data centers need nearby warehouse space for the duration of multi-year projects. A second user group — companies that maintain racks, servers, and parts — typically locates within close proximity to those facilities on a permanent basis. Link Logistics research indicates approximately 2 million square feet of spillover demand per gigawatt of data center construction.

In Phoenix, where TSMC has committed billions to a North Phoenix semiconductor campus, Wylie said 36 chip companies have relocated to the greater metro since 2021. Advanced manufacturing tenants, including robotics, semiconductor fabrication, and defense and aerospace companies, are also driving industrial demand in markets including the Bay Area, Orlando, Southern California, and the Midwest. Wylie described this trend as traditional industrial being pushed into "higher and better uses."

Power Capacity Becomes a Critical Real Estate Specification

Among the shifts in what industrial tenants prioritize when evaluating warehouse real estate, power capacity has emerged as a defining factor alongside traditional specifications such as clear heights and loading configurations.

AI, automation, and robotics are driving tenants to evaluate buildings not just for current operational needs but for what their operations will require in three to five years, Wylie said. The questions he hears most often from prospective tenants include whether a building can support automation, accommodate EV charging, and handle a future production line addition.

Power capacity, Wylie indicated, has become as important a specification as dock doors or clear height, and buildings that can credibly address those future requirements are commanding more attention in the leasing process.

Tariff Uncertainty Has Not Halted Leasing Activity

During the initial tariff announcements in 2025, there was a near-halt in leasing decision-making as businesses waited to assess the impact, Wylie noted. That dynamic has since shifted. Most customers are now moving forward with leasing decisions despite ongoing uncertainty — what Wylie described as "playing through" the uncertainty rather than pausing because of it.

With construction starts at decade lows and availability declining across both small bay and bulk distribution segments, Wylie said the conditions shaping the industrial real estate market appear likely to persist. Link Logistics operates last-mile industrial real estate across North America.

Sources

Link Logistics — Is the Industrial Real Estate Market Tightening? What Industry Leaders Are Watching (June 1, 2026)