REAL ESTATE NEWS

Warehouse utilization remains below the expansionary level of 85.5% this year but is on an upward trajectory, led by essential goods, e-commerce, and manufacturing users, according to Prologis’ Supply Chain Trends report. Wholesale and manufacturing customers frontloaded inventory in early 2025, driving utilization higher, with retailers following suit as they shifted inventories ahead of the holidays.

The report projects that customers will reach functional capacity next year if the current pace of expansion continues. This trajectory mirrors previous periods of rapid reabsorption, including 2014–2015 and 2021–2022, when utilization rebounded sharply after periods of elevated vacancy and logistics slack.

“With excess space worked out of the system, more users will return to net growth for their logistics footprints,” Prologis noted.

E-commerce companies are expected to account for roughly one-quarter of new leasing next year as online sales approach 20% of total retail worldwide by year-end. These companies are refining regional diversification strategies: Asian e-commerce players that initially entered the U.S. market through direct leases and third-party logistics partnerships are now expanding into Europe and Latin America to support cross-border fulfillment. The U.S. model is evolving as changes to de minimis import thresholds are prompting e-commerce companies to adopt blended strategies that combine onshore inventory, sea-cargo cross-docking, and faster regional fulfillment to minimize duties and streamline cross-border deliveries.

Transportation is projected to take an even larger share of total supply chain spending as trucking capacity tightens, pushing rates up by double digits next year. This trend, driven by a freight recession and new regulations, will heighten the value of well-located logistics real estate, which can shorten delivery distances, reduce transit times, and offset rising transport costs. New rules, including English-language requirements, may further reduce the number of available truckers in the U.S.

Smaller carriers are facing mounting cost pressures, with active carrier authorities falling 12% below 2022 peak levels and tender rejection volumes rising 126 basis points above 2024 levels. Spot rates have increased 4% vs. the 2024 average, with further gains expected into 2026.

Source: GlobeSt/ALM