Industrial Just Booked Its Third-Strongest First Half on Record

The Signal:

• Big-box demand is back after a tariff-driven pause.
• Sublease space is bleeding off, tightening the effective market.
• The tenant mix has shifted toward logistics and reshored manufacturing.

Industrial has moved decisively past its cyclical peak in vacancy. The signal is not the level — 6.9% is healthy but unremarkable — it's the velocity: 491 million square feet of first-half leasing, up 27% year-over-year, the third-strongest first half on record behind only 2021-22.

When 750,000-plus-square-foot requirements lead the market, it means the biggest, most schedule-sensitive occupiers have decided the tariff and supply-chain fog has cleared enough to commit. Quarterly net absorption topped 60 million square feet for the second time in three quarters.

The demand base has re-composed. 3PLs and manufacturers now drive more than half of activity — a reshoring-and-logistics story, not a pure e-commerce one. That changes the geography of demand toward inland hubs, ports, and manufacturing corridors.

The structural read mirrors office: absorption accelerating while new supply stays modest and sublease space declines. Two different asset classes recovering off the same mechanic.

Implications: Owners of well-located big-box product hold pricing leverage into a thinning sublease market. Developers face a cleaner demand signal than in two years, but the winning starts are large, powered, intermodal-connected sites. For capital, industrial's reset is over and the sector is re-entering a landlord's market — selectively, at the top of the size range.