Warehouse real estate is rebalancing. Here’s what to watch for

A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.

After a pandemic-driven surge, and a subsequent pullback, warehouse real estate supply and demand is finally starting to come into balance and showing new signs of life. 

E-commerce, which was the primary driver of the recent boom cycle, certainly hasn’t gone away, but more people are returning to brick and mortar. Warehouse tenants are now more focused on efficiency, power and location than they are on square footage. 

New development has slowed down, and federal policies are pushing onshoring of manufacturing, which helps the sector counter still-high interest rates and economic uncertainty. Rent increases are no longer as steep as they were a few years ago, and in some markets they are actually falling slightly due to oversupply.

“Industrial property rents are showing signs of stabilization, indicating a more balanced market environment,” said Judy Guarino, managing director of commercial mortgage lending at JPMorgan Chase, in a note to investors.

Here’s what to watch for in warehouses in 2026. 

The big-box subsector refers to large, modern distribution and warehouse facilities that serve as hubs for logistics, storage and e-commerce fulfillment. It makes up about a quarter of the total industrial warehouse space in the U.S. 

Vacancies are close to cyclical peaks and new construction is contracting, according to industry data. In the first half of this year, new supply still outpaced new demand, but the gap shrank, according to new research from Colliers. Third-party logistics firms, including delivery services such as Ryder and DHL moving goods on behalf of a client, are leading that demand.

“The third-quarter demand has far exceeded the entire first half of the year, which is another really strong indicator that the supply and demand is starting to get more into a balanced state,” said Stephanie Rodriguez, national director of industrial services at Colliers. 

Across the 20 largest markets, the overall big-box vacancy rate rose 19 basis points to 11% during the first half of the year, according to Colliers. New supply totaled 48 million square feet in the first half of 2025, much less than the 330…