Industrial leasing in the U.S. has shifted decisively in 2025, as smaller tenants and regional manufacturers step in to drive activity while large users and major investors remain cautious in the face of prolonged trade and economic uncertainty, according to CBRE’s latest analysis.
CBRE says that smaller user activity has become the primary driver of current leasing, amid an investment landscape that has stabilized after a period of uncertainty sparked by shifting trade policies and market conditions.
According to John Morris, president of Americas industrial & logistics, advisory services at CBRE, leasing activity from larger industrial users remains muted, a trend that has persisted for over two years. “The biggest users are quiet. They’ve been quiet for two-plus years now, and I think that community is going to need to see better economic news before the big million foot business really comes back,” Morris explained in a company podcast. For now, he said, the demand is being led by users in the 50,000 to 100,000 square foot range, a shift from the pandemic era’s bulk leasing that pushed the market to new heights in 2021 and 2022.
Investor activity also experienced a brief slowdown following “Liberation Day,” the moniker given to the period of policy and economic uncertainty surrounding major trade developments. Will Pike, president of industrial & logistics, capital markets at CBRE, noted, “We did see a pullback immediately after Liberation Day… Since then, it’s pretty much business as usual. We have more clarity on trade policy, and capital markets have definitely settled.”
Pike observed that, despite some softening in select port markets, certain regions, such as South Florida, are seeing record-high capital markets activity and demand.
The research underscores that overall, industrial real estate remains stable and attractive, but the environment has normalized following the post-pandemic frenzy. Pike emphasized that while the sector is now seen as a steadier investment, opportunities remain for enhanced returns.
“Where you would see outsized returns would be if you’re willing to go in more tertiary markets, take leasing risk in a marketplace where leasing assumptions are not as aggressive as they once were,” he said. Abundant core and core-plus capital continue to support the sector, providing a buffer against volatility.
Manufacturing-driven leasing has emerged as one of the most notable bright spots, rising 50 percent year-over-year according to CBRE. Morris described a climate of growing optimism among smaller, regional manufacturers, many of whom are moving to larger spaces as demand for assembly and light-production facilities increases. However, he cautioned that large-scale, cross-border manufacturing investments are still being held back by persistent uncertainty about trade relations with countries like Mexico and Canada.
“Right now, the manufacturing curve is very positive related to smaller manufacturing and assembly, but the heavy manufacturing investments, those users are asking us a lot of questions, and they’re testing possibilities. Haven’t seen significant big investment at this point.”
Source: “Smaller Tenants Lead Industrial Leasing as Big Users Hold Back”
