Key Takeaways
- • Logistics real estate demand has reached an inflection point, with net absorption, new lease signings, and build-to-suit activity all showing signs of a market turning corner as of November 2025.
- • Larger customers are actively reprioritizing and locking in logistics space, with 60% of Prologis's customer base currently expanding while selective verticals—particularly home-related sectors—demonstrate the strongest leasing momentum.
- • Supply-demand dynamics are rebalancing after years of undersupply; global logistics deliveries have fallen to decade lows while demand increased 41% year-over-year, positioning the sector for sustained equilibrium.
- • Manufacturers and wholesalers are outpacing retailers in facility utilization, indicating uneven sector recovery with retailers still in early stages of catch-up leasing activity.
- • Historical patterns suggest midsize customer demand will follow larger tenant activity, supporting continued logistics real estate strength despite moderation from peak cycle conditions.
Summary
The logistics real estate market is entering a critical transition phase as of November 2025, according to Prologis research. After years of sustained tailwinds driven by e-commerce growth and supply-chain restructuring, demand indicators are showing signs of normalization. Key metrics including net absorption, new lease signings, and build-to-suit pipeline activity have all reached an inflection point, marking a shift from the exceptional growth that characterized the post-2020 period.
Tenant behavior reveals a bifurcated market dynamic. Larger logistics customers are prioritizing facility expansion and locking in long-term lease commitments, with 60% of Prologis's customer portfolio actively expanding operations. This large-tenant activity historically precedes similar moves by midsize users, suggesting demand momentum may extend into 2026. Vertical market performance remains uneven: manufacturers and wholesalers lead in facility utilization rates, while the retail sector is only beginning to accelerate its logistics footprint expansion.
Supply-demand rebalancing is reshaping market fundamentals. Global logistics real estate deliveries have contracted to decade-low levels while year-over-year demand increased 41%, indicating sustained structural need despite moderation from peak cycle levels. This disciplined supply environment has been fundamental to the sector's expansion, with completions expected to fall short of demand across most major markets over the next decade. The broader backdrop includes resilience in consumer spending, as September 2025 Mastercard SpendingPulse data continues to support underlying demand strength.
The inflection observed across the 13 largest U.S. logistics markets reflects healthy recalibration rather than demand destruction. Take-up levels remain elevated relative to historical baselines, and larger tenant commitments suggest confidence in medium-term business expansion. As the market moves from scarcity-driven pricing into balanced supply-demand conditions, the sector is positioned for sustained but more moderate growth compared to the exceptional 2022–2024 expansion cycle.
Tenant behavior reveals a bifurcated market dynamic. Larger logistics customers are prioritizing facility expansion and locking in long-term lease commitments, with 60% of Prologis's customer portfolio actively expanding operations. This large-tenant activity historically precedes similar moves by midsize users, suggesting demand momentum may extend into 2026. Vertical market performance remains uneven: manufacturers and wholesalers lead in facility utilization rates, while the retail sector is only beginning to accelerate its logistics footprint expansion.
Supply-demand rebalancing is reshaping market fundamentals. Global logistics real estate deliveries have contracted to decade-low levels while year-over-year demand increased 41%, indicating sustained structural need despite moderation from peak cycle levels. This disciplined supply environment has been fundamental to the sector's expansion, with completions expected to fall short of demand across most major markets over the next decade. The broader backdrop includes resilience in consumer spending, as September 2025 Mastercard SpendingPulse data continues to support underlying demand strength.
The inflection observed across the 13 largest U.S. logistics markets reflects healthy recalibration rather than demand destruction. Take-up levels remain elevated relative to historical baselines, and larger tenant commitments suggest confidence in medium-term business expansion. As the market moves from scarcity-driven pricing into balanced supply-demand conditions, the sector is positioned for sustained but more moderate growth compared to the exceptional 2022–2024 expansion cycle.
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