U.S. Industrial Investment Sales Up 12% Annually in Q4 2025: Report

The U.S. industrial market is showing some signs of improvement with renewed leasing, increased investment sales, and a  number of expiring leases rolling into the market that are expected to reach 1 billion square feet over the next three years.

A new report from Newmark found that net absorption for U.S. industrial hit 62 million square feet in the fourth quarter of 2025, the asset class’ strongest quarterly performance in two years. Moreover, industrial investment sales hit $104 billion in Q4, an increase of 12 percent year-over-year. 

“The industrial downturn has ended. We’re on the upswing and we’re seeing budding confidence in the market,” said Lisa DeNight, Newmark’s managing director of North American industrial research and the author of the report. 

DeNight pointed to leasing volumes increasing 20 percent year-over-year in Q4, as well as steady and persistent construction metrics, all of which imply a return to overall stability and potentially meaningful decreases in vacancy as early as 2027. 

“It’s a moment of stabilization and modest growth, where 2027 will bring quicker tightening to the market,” she said. “We’re on the right path.”  

DeNight also noted an increase in land sales to data center developers of sites now zoned solely for industrial as one of the lesser-known demand drivers for the industrial market. She said those trades will restrict available land for new supply and place increased demand on existing facilities, likely driving down vacancies and generating juicy rent metrics for owners and developers alike. 

She said that, prior to 2020, only 7 percent of land zoned for industrial use was being sold to data center developers, but today that number has increased tenfold to around 70 percent. 

“There’s an impact coming to what we’re going to be able to put into the core industrial pipeline going forward,” DeNight said. “You can’t build new land, and it’s very challenging [to construct new industrial] in some of these markets that are seeing outsized data center development.” 

And then there’s the tariff story. 

It is impossible to discuss the U.S. industrial market without grappling with the Trump administration’s “Liberation Day” tariff policies announced during the second quarter of 2025. 

Newmark data found the nation’s radical tariff policy changed every 4.7 days on average in 2025, creating widespread uncertainty for developers and investors, and keeping cargo imports lower than its 2017-2019 averages. Retail inventory-to-sales ratios — a demand metric —  remained below pre-pandemic levels on the year, despite improved numbers in the first quarter of 2025.   

DeNight described the Trump administration’s tariff regime as “one big red pause button” that created a very limited amount of absorption for the asset class and pushed demand and leasing into the third and fourth quarters of the 2025, likely resulting in the positive metrics. 

“That second quarter was a big wrench thrown into last year, due to the true uncertainty of it all,” she said. “And while the uncertainty still persists, we’re definitely past the worst. And what we saw in terms of the industrial market, following that one quarter, was there was a surge of leasing activity, and a coming back to business norms [in the third and fourth quarters].” 

DeNight also noted that the 60 million square feet of net absorption in fourth quarter 2025 was partially tied to “a generational volume of leases” rolling onto the market over the next three years, with more than 1 billion square feet of new supply coming online for rent, many of which will be outfitted with newer industrial properties, carrying robotics and automated technology. 

Right now, the overall pipeline is around 300 million square feet, according to DeNight. 

“I really can’t understate how many lease events are coming up over the next two years,” said DeNight. “In 2026, we’re in the single largest year of lease events, i.e. leases expiring, so people have to make decisions.” 

Brian Pascus can be reached at bpascus@commercialobserver.com.