3PL Demand Keeps U.S. Warehousing Market Growing Despite High Vacancies

Demand from third-party logistics providers (3PLs) is sustaining growth in U.S. warehousing and
fulfillment space despite higher vacancy rates and soft freight volumes, according to real estate
services firm Jones Lang LaSalle (JLL). Developers, meanwhile, are shifting focus toward data
centers, expected to drive industrial construction in the coming years.

JLL’s U.S. Industrial Market Dynamics report showed the national vacancy rate rose to 7.6
percent in the third quarter of 2025 from 6.8 percent a year earlier, surpassing the pre-pandemic
average of 7.1 percent. The increase stemmed from new warehouse capacity that came online
after the pandemic construction boom.

Frontloaded imports ahead of tariff hikes helped fill some space, while bonded warehouses saw
higher demand due to trade uncertainty. Leasing activity reached 146.2 million square feet in
the third quarter — the highest since early 2024 — and the development pipeline rose to 246.8
million square feet, its first increase in three years.

Developers expect vacancy rates to ease as shippers commit to longer-term plans amid fading
tariff concerns. E-commerce and 3PL activity continue to underpin demand, with growing
interest in AI-equipped, automated facilities.

Data centers, however, are emerging as the next major growth driver. CBRE CEO Robert
Sulentic said data center projects could represent about 10 percent of company earnings in
2025, adding, “It’s going to be a big build cycle over the next five years, maybe longer.”

Though data centers require fewer workers once completed, they demand significant land and
energy, competing directly with logistics warehouses. Prologis CFO Timothy Arndt said
developers remain optimistic despite slower-than-expected tightening. “They need to make
these long-term decisions and can no longer be held back,” he said.