Cushman & Wakefield Research Shows Large Warehouse Deals Roar Back as Big-Box Leasing Rebounds Across U.S.
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net absorptiontechnical
Net absorption measures how much usable commercial space becomes occupied or vacant over a set period by subtracting space vacated from space newly leased; it is essentially the net change in occupied square footage. Investors care because it shows real demand for properties—rising net absorption is like water flowing into a bucket (more tenants moving in), which tends to support higher rents and property values, while falling absorption signals weakening demand.
build-to-suittechnical
Build-to-suit is a process where a property is custom-designed and constructed specifically to meet the needs of a particular tenant or user. It’s like ordering a custom-made suit instead of buying one off the rack—tailored to fit exactly what the tenant requires. For investors, build-to-suit properties can offer stable, long-term income because they are designed to attract and retain specific tenants who often sign long-term agreements.
third-party logistics providers (3PLs)technical
Third-party logistics providers are outside companies that handle storage, shipping, order fulfillment and related transportation tasks for other businesses, like a hired delivery and warehouse team. Investors care because these providers affect a company’s ability to get products to customers quickly and cheaply; strong logistics partners can cut costs, improve sales and reduce inventory risk, while weak ones can cause delays, higher expenses and lost revenue.
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Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.
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Net operating income is the profit a business makes from its core operations after subtracting the costs directly related to running those operations, but before accounting for taxes, interest, or other expenses. It shows how efficiently a company is generating income from its main activities. Investors use this figure to assess the company's operational performance and profitability.
NEW YORK--(BUSINESS WIRE)--
Large-format industrial leasing is back in a big way. According to new research from Cushman & Wakefield, demand for warehouses larger than 500,000 square feet surged in the second half of 2025, signaling a strong rebound in big-box activity after a brief slowdown in 2023 and 2024.
The report, Large-Format Deals Return, finds that deals over 500,000 square feet jumped 32% year over year, with third-party logistics providers (3PLs) and manufacturers accounting for nearly two-thirds of that activity. In total, 113 million square feet of net absorption occurred in newer, larger warehouse and logistics facilities, representing 64% of the nationwide total.
“This is a clear return of the large-format tenant,” said Jason Price, Americas Head of Logistics & Industrial Research at Cushman & Wakefield. “Companies are consolidating operations, upgrading to higher-quality facilities, and making more strategic decisions about where and how they deploy space.”
Consolidation and the ‘flight to quality’
The research shows that many occupiers are exiting multiple smaller, outdated buildings and consolidating into modern Class A facilities with higher clear heights, stronger power capacity, and infrastructure that supports automation and robotics. This “flight to quality” is also driving more build-to-suit activity, as tenants look to customize facilities for efficiency and long-term operations.
Build-to-suit development rose 11% in 2025, and nearly one-fifth of all leasing activity above 500,000 square feet was tied to build-to-suit projects. Large build-to-suit projects currently underway increased 14% year over year, positioning them as a key driver of net absorption in 2026.
Cost pressures reshape where companies grow
Cost sensitivity is also playing a major role in market selection. Of the 104 large leases signed in 2025, 71% were in markets priced below the national average rent, and nearly two-thirds were in markets at least 20% cheaper than the U.S. average. As a result, demand is increasingly shifting toward inland and lower-cost markets, and away from higher-priced coastal and port-adjacent locations.
“With occupancy tightening and new supply limited, tenants are getting more strategic about both location and design,” said Price. “We’re seeing a strong focus on efficiency, total occupancy cost, and long-term operational performance.”
Implications for occupiers and investors
The report also notes that vacancy rates for large warehouses declined by 140 basis points year over year, while user-purchase activity hit 36.7 million square feet in 2025, the highest level of the decade. With fewer large speculative projects in the pipeline and demand reaccelerating, conditions are expected to support improving occupancy and future rent growth, particularly for high-quality assets.
For investors, rising interest in well-located, modern industrial properties is supporting increased capital deployment and healthy net operating income growth, especially in key distribution markets.
Looking ahead
With large-format leasing back at multi-year highs, build-to-suit development accelerating, and cost-conscious strategies reshaping location decisions, Cushman & Wakefield expects momentum in the industrial sector to continue into 2026, especially for newer, larger logistics facilities.
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for occupiers and investors with approximately 53,000 employees in over 350 offices and nearly 60 countries. In 2025, the firm reported revenue of $10.3 billion across its core service lines of Services, Leasing, Capital markets, and Valuation and other. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture. For additional information, visit www.cushmanwakefield.com.
