Shifting Dynamics in Industrial Real Estate: Key Trends for CRE Leaders in 2025

The industrial real estate market has experienced unprecedented growth in recent years, driven by booming e-commerce, reshoring trends, and government incentives like the Chips Act. However, 2025 will mark a shift as the sector transitions from rapid expansion to stabilization. Occupiers now have more leverage in select markets, but macroeconomic factors, evolving tenant demands, and policy changes will shape the road ahead. From rising expectations for highly amenitized industrial spaces to navigating trade policies and workforce challenges, CRE leaders must stay ahead of these key trends to make informed decisions and seize opportunities. Here's what industrial real estate leaders need to know to succeed in 2025.

Key Industrial Market Trends to Watch

Shift in Leverage:

After years of record construction/deliveries, the past year was a time to take stock in the market as the dust settled. Occupiers in some markets enjoyed a window of leverage. This window will remain open as many companies take a wait and see an approach to macro-economic trends.

Amenities:

Not only is there a flight-to-quality in the office market,  but industrial users also want highly-amenitized buildings that meet power demands, the ability for flexibility of space, generous clear heights, energy efficiency, and in some cases child-care and wellness programs.

Policy Change:

Trade and tariff policy will take a front seat, with the shakeout having a potential huge fallout on the health of the industrial sector. This is particularly true for companies that are in the process of shifting production back to the United States or near-shoring. The ramifications will extend to protecting and stabilizing supply chains.

Chips Act:

After several years of billion-dollar-plus investment announcements because of the August, 2022 passage of the Chips Act, 2025 will be the year to see if companies can navigate the bureaucracy and finally receive money to move forward with plans.

Labor Pains:

Advanced manufacturing and the need for a skilled workforce will put more focus on the availability of labor in location decisions.

The industrial real estate market is entering a pivotal phase in 2025. While there is still strong demand for modern, efficient facilities, occupiers are becoming more selective, prioritizing spaces that meet their power, flexibility, and sustainability needs. Policy shifts, particularly around trade and tariffs, will play a critical role in shaping the market, while government programs like the Chips Act could make or break major investments in advanced manufacturing. At the same time, labor availability will be a key consideration for site selection, as companies seek skilled workers to operate increasingly sophisticated processes and facilities. For industrial real estate leaders, the path to success in 2025 will require a mix of adaptability, foresight, and a deep understanding of these evolving dynamics.

Need help navigating industrial real estate trends in 2025? Let us guide your site selection and leasing strategy. Get in touch today. 

By Greg Schementi and Tricia Trester