In 2025, leasing activity for big warehouses in the US surged, which means there is a new need for huge distribution centers.
According to new research from Cushman & Wakefield, deals for warehouses bigger than 500,000 square feet went up 32% from one year to the next. After a slowdown in 2023 and 2024, this rebound appears after a time when warehouses grew quickly throughout the pandemic.
In 2025, companies took up 113 million square feet of space in newer, bigger logistical and storage facility buildings. The report said that was 64% of the total for the whole country.
Third-party logistics companies and manufacturers were responsible for a lot of the activity, accounting for almost two-thirds of large warehouse leasing.
Jason Price, the head of logistics and industrial research for Cushman & Wakefield in the Americas, said, “This is a clear return of the large-format tenant. Companies are consolidating operations, upgrading to higher-quality facilities, and making more strategic decisions about where and how they deploy space.”
Consolidation and new buildings
It is well to be noted that the move toward warehouses bigger than 500,000 square feet especially the modern logistics buildings is one of the main trends that is driving demand. A lot of businesses are shutting down several smaller or older structures and moving their operations to newer Class A distribution centers that are built for automation as well as handling large amounts of goods.
These buildings usually have higher clear heights, more electrical power, and layouts that make it easier for robots along with other warehouse technologies to work.
The trend is also helping build-to-suit development grow. Cushman & Wakefield said that build-to-suit projects went up by 11% in 2025. Almost one-fifth of large warehouse leases were for buildings that were made just for that tenant.
There are at present 14% more large build-to-suit projects going on than there were in 2025. This could lead to even more demand in 2026.
Tenants are drawn to markets with lower rents
Cost pressures are also changing where businesses put their biggest distribution centers. The report says that 71% of big leases, which were signed in 2025, were in areas where rents were lower than the national average. Almost two-thirds of them were in markets where prices were at least 20% lower as compared to the U.S. average.
That trend demonstrates that businesses are moving increasingly to inland and lower-cost logistics hubs rather than coastal markets where prices are higher.
Price adds that “With occupancy tightening and new supply limited, tenants are getting more strategic about both location and design,” Price said.
Apparently, the vacancy rates for big warehouses also went down by 140 basis points year over year. This is yet another indication that demand for modern logistics facilities is indeed picking up following the pandemic, which slowed things down.
