U.S. Warehouse Vacancies: What a “Steady” Q3 Means for Your Financial Plan

What changed in Q3?

U.S. warehouse vacancy held roughly steady around 7.1% in the third quarter, signaling that the post-pandemic whiplash is easing as demand firms and new construction slows.

Why did vacancy flatten instead of rising again?

New supply is shrinking. Developers have pulled back: quarterly completions fell sharply from a year ago and the construction pipeline is at its lowest level since 2017. That gives the market time to digest the build-boom deliveries from the past few years.

Are rents falling—or just flat?

Plateauing is the better word. National asking rents hovered near ~$10 per sq. ft. over the summer and moved only nominally quarter-to-quarter. In many metros, landlords are protecting headline rates with concessions rather than broad price cuts.

Which regions are bucking the average?

Markets that took a burst of new deliveries can see short-term vacancy bumps, while tight infill locations stay resilient. San Diego is hovering near the national rate with a modest pipeline, while Houston shows healthy absorption alongside vacancy that’s near the U.S. average. The takeaway: metro-level fundamentals differ—sometimes a lot.

What does this mean for inflation and the real economy?

Logistics real estate touches freight, e-commerce, and inventories. A steadier vacancy rate with fewer new builds tends to reduce volatility in storage and distribution costs, which can be mildly disinflationary at the margins as supply chains normalize.

Investment takeaway: how should long-term investors think about this?

• Normalization, not contraction. Demand drivers are reverting to pre-pandemic basics—e-commerce growth, safety-stock strategies, and nearshoring—while supply cools. That combination typically supports steadier cash flows for high-quality assets.

• Quality gap matters. Modern, efficient facilities—clear heights, power availability, trailer parking, proximity to populations—continue to lease faster and at better terms than older stock.

• Expect dispersion. National vacancy may look flat, but outcomes will diverge by metro as backlogs clear and local demand ebbs and flows.

How could this affect your financial plan?

For most diversified investors, the impact is indirect—through earnings sensitivity in logistics-heavy sectors (retailers, parcel carriers, 3PLs) and through REIT fundamentals tied to occupancy, rent growth, and development yields. If vacancy holds steady while supply fades, the balance of risk shifts from oversupply toward gradual absorption, which can be constructive for quality-focused strategies over a multi-year horizon. As always, allocations should reflect your goals, time horizon, and risk tolerance.

Bottom line

Balance is returning. Vacancy has stopped climbing, supply is tightening, and rents are largely holding the line. For long-term plans, that points to stability rather than stress—though metro and asset quality differences remain meaningful. If you want help translating these trends into portfolio and cash-flow decisions, talk with a fiduciary advisor.

FAQ

How did U.S. warehouse vacancy change in Q3 2025? It stabilized near ~7.1%, a pause after earlier increases, as demand improved and construction slowed.

Is new industrial supply still coming? Yes, but far less. The under-construction pipeline fell to the lowest level since 2017, and quarterly completions dropped sharply year-over-year.

Where are conditions tightest? Tighter, infill markets with smaller “last-mile” facilities often outperform the national average; metros like San Diego and Houston show how local fundamentals can diverge.

What should investors watch next? Watch absorption versus completions, rent trendlines around ~$10/sq. ft., and sublease availability. A thinner pipeline could let demand gradually absorb space.

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Resources

• The Wall Street Journal. “U.S. Warehouse Vacancies Steady as Demand Rises With Less New Space.” Oct. 2025.

• Cushman & Wakefield. “U.S. Industrial MarketBeat,” Q3 2025 highlights and pipeline/completions.

• JLL. “U.S. Industrial Market Dynamics,” 2025 rent and construction trends.

• Colliers. “San Diego Region Industrial Report | Q3 2025.”

• Cushman & Wakefield. “Houston Industrial MarketBeat | Q3 2025.”

• CBRE. “U.S. Real Estate Market Outlook 2025 – Industrial & Logistics” and Midyear Update.

• Prologis Research. “Logistics Customers Continue to Grow Into Excess Capacity,” Nov. 2024.