Industrial on the Up With $34B Sales Through First Half of 2025

Even amid tariffs, high interest rates and a global trade upheaval, industrial as an asset class is having an active 2025, though challenges remain in the form of high national vacancies. 

A new report on the U.S. industrial sector from CRE tech firm CommercialCafe found that industrial investment sales in the first half of the year reached $33.8 billion, up 15 percent from 2023’s volume and on pace to meet or exceed the $74.3 billion in sales that marked the entire year of 2024. 

Moreover, prices remain steady, with in-place rents reaching $8.63 per square foot nationally in July, an increase of 6.1 percent year over year. 

However, the asset class delivered 170 million square feet of new construction and only has 340 million square feet under construction through the first half of the year. Much of this will likely need until next year to complete, as it carries a projected expansion of 1.7 percent — numbers far below the 400 million square feet delivered last year and the record-breaking 607 million square feet delivered in 2023.  

“Industrial was the darling asset class of commercial real estate coming out of the pandemic,” wrote Commercial Cafe analysts. “Investor appetite for the sector led to elevated construction, as well as record-breaking sales volumes. However, things started slowing down around the second half of 2022 and seem to be leveling off despite headwinds.”  

Even so, researchers are encouraged by the sales rebound. The asset class sales volumes peaked at the height of the pandemic in 2021 with nearly $130 billion in transaction volume. But high inflation, a tight monetary policy by the Federal Reserve and higher-for-longer interest rates sunk transaction volumes to $64.8 billion just two years later in 2023. 

But even if transactions have rebounded, however slightly, the average sales price has remained constant for the last three years. Industrial transactions that closed in the first six months of 2025 have an average sales price of $129 per square foot, only 6 percent higher than the 2022 average sales price of $121 per square foot. 

By comparison, during the record rent growth and low vacancy totals of earlier in the decade, industrial properties’ average sales price increased by 54 percent between 2019 and 2022, from $79 per square foot to $122 per square foot. 

“We’ve watched the industrial investment market move from darling to resilient over the past few years, but we anticipate activity and interest to ramp up with the expectation of economic clarity, coupled with growing demand for space,” wrote Peter Kolaczynski, the director at Yardi Research, which participated in the report. 

The surge of supply that characterized the earlier part of the decade has decidedly pushed up industrial vacancies. The national vacancy rate stood at 9.1 percent in July 2025,  an increase of 2.7 percent year over year and a far cry from the 2.8 percent national vacancy rate the asset class saw in mid-2022. 

“Record supply in recent years has pushed the vacancy rate up across most markets in the country, but a vacancy plateau may be underway in the coming months as the supply boom continues to fade,” wrote the CommercialCafe analysts.  

Cities with high industrial vacancies include Miami (11.4 percent), New Jersey (11.2 percent), and Dallas-Fort Worth (10.2 percent), but Los Angeles — a major national port and industrial hub — saw its vacancy rate decline by 1.5 percent from mid-2024 to mid-2025. 

“Los Angeles emerged as a standout performer,” wrote researchers. “[A vacancy rate of 8.1 percent] while middling in absolute terms represents a rare decrease of 150 basis points compared to last year, and marks the second-largest vacancy contraction nationwide.” 

But the industrial market to watch going forward is Dallas-Fort Worth. The metropolitan region saw a national high of $2.3 billion in industrial sales for the first half of 2025 and a national high of 30.6 million square feet of industrial space under construction through the year, essentially double the next highest totals coming out of Phoenix and Houston. 

“An influx of more than $600 million [sales] into the Dallas-Fort Worth market last month brought its year-to-date total to more than $2.3 billion, nearly matching sales volumes from the same period in 2024,” analysts wrote. 

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