2025 Biannual Industrial Market Report: Part Two

CompStak analyzed eight major U.S. industrial markets and billions of square feet of lease and sale data. The latest data shows the industrial sector entering its most meaningful reset since the pandemic boom. Check out the full insights in the 2025 Biannual Industrial Market Report.

Consumer Spending Picks Up Across Durable Segments as Overall Retail Spending Grows Year Over Year For 12 Straight Months

Despite declining consumer sentiment and concerns about the economy and tariffs, retail spending from January to September 2025 shows a clear rebound compared with the same period in 2024, as each month through September 2025 posted year-over-year growth. In addition, several goods-heavy categories posted strong recoveries that carry upstream implications for manufacturing and logistics. Furniture and Home recorded the largest improvement with a 10.1-point gain, followed by Automotives, Sporting Goods, and Clothing, which all indicate strengthening demand for durable and semi-durable goods. Even traditionally stable segments such as Non-Store Retailers and General Merchandise maintained steady growth, which reflects continued resilience in e-commerce and broadline retail channels (large, multi-category retailers that sell a wide range of everyday goods across apparel, home, and general merchandise). Overall, the shift toward higher consumer demand, particularly in categories linked to industrial space, points to improving conditions for suppliers, distributors, and freight networks as the market moves into 2026.

November 2025 LMI Shows Rising Inventory Costs and Moderating Inventory Levels, Signaling Cautious Expansion in Logistics

The overall November 2025 LMI results remained above 50.0, communicating that the logistics sector remains in expansion territory, which continues to shape demand for industrial warehouse space. Inventory Costs trended up from 70.2 in January 2025 to 70.8 in November 2025, a 2.9% increase from November 2024 that indicates rising cost pressure. The index for inventory cost fluctuated throughout the year, likely reflecting the impact of tariffs and turbulent policy around them, reaching a 2025 peak of 80.9 in June 2025. Meanwhile, the index for Inventory Levels fell over the same period, from 58.5 in January 2025 to 52.5 in November 2025, a 6.4% decline from November 2024. Taken together, the data suggest logistics managers are feeling cautious, balancing higher carrying expenses with a pullback in inventory growth. Since the overall reading remains above 50, logistics activity is still expanding, supporting steady but selective demand for warehouse space.

Industrial Vacancy Rose Faster Year Over Year in Q3 2025 Than in Q3 2024

Industrial vacancy continued to rise in 2025, with the pace of year-over-year increases accelerating each quarter compared with 2024. The NCREIF vacancy rate climbed from roughly 2.5% to 3.0% from Q1 to Q3 2024, while it increased from 4.0% to 4.4% in 2025 across the first three quarters, representing year-over-year increases of about 1.4 to 1.5 percentage points each quarter. By comparison, vacancy gains in 2024 ranged from 0.8 to 1.0 percentage points year over year. The data indicate that vacancy is rising at a faster pace in 2025 as the market continues to normalize from the historically low levels of 2021 and 2022.

Check out the full insights in the 2025 Biannual Industrial Market Report.