Industrial Site Plans in the U.S.: Flex, Warehouse, and Storage Site Trends

Introduction

The U.S. industrial real estate sector is at a pivotal moment, with industrial site plans evolving in response to shifting market forces. From sprawling logistics warehouses to versatile flex spaces and specialized storage facilities, each asset type is experiencing unique trends in supply, demand, and design. In the wake of an e-commerce boom and subsequent construction wave, national industrial vacancy has climbed to a decade-high (~7.4%) while rent growth has essentially stalled. This article blends an architectural analysis with broader market insights—drawing on the Innowave database—to examine current trends in industrial site planning. We’ll explore demand-supply dynamics, rent and vacancy patterns, construction activity, and strategic considerations for developers, investors, architects, municipalities, and logistics professionals. The goal is to provide a comprehensive, accessible look at flex space site plans, warehouse site plans, and storage site plans across the United States, including metro-level variations and the implications of macroeconomic shifts.

Industrial Market Trends Overview

The industrial real estate market has cooled from its red-hot phase of 2021–2022. Annual new construction deliveries (nearly 293 million sq. ft. nationally) have far exceeded net absorption of space (about 67 million sq. ft. in the past year), creating a glut of supply. As a result, vacancy rates have risen steadily for almost three years, reaching approximately 7.4% as of Q3 2025. This marks the highest national industrial vacancy in roughly a decade, a stark change from the sub-4% vacancies seen in 2022. With more space available, negotiating power has shifted toward tenants – a trend evident in flatlining rents and increasing lease concessions. National asking rents are no longer rising, and year-over-year rent growth has slowed to just 1.7% (down from a 9%+ record high in 2022), with quarterly rent growth effectively at 0% most recently.

Demand-supply dynamics: Industrial demand, while still positive, has moderated. In the first quarter of 2025, net absorption was about 17.7 million sq. ft., a decent figure but part of a downward trend over the past year. At the same time, new listings of available space hit near-record levels. The industrial availability rate (which includes vacant space plus space under construction) has jumped to roughly 9.6% nationally, reflecting the volume of projects delivered or underway that have yet to find tenants. In many markets, supply growth is still outpacing demand, ensuring that vacancy will stay elevated in the near term. Impending deliveries in late 2025 are projected to push vacancy even higher before the market can regain equilibrium.

Macroeconomic headwinds: Broad economic shifts are also influencing industrial site planning. Trade policy uncertainties – such as tariffs and geopolitical tensions – are creating downside risks for logistics-focused warehouses, especially in port-dependent regions. A recent trade spat with China, for example, coincided with a steep drop in imports at major U.S. seaports and could dampen warehouse demand if international trade remains curtailed. Consumers are facing higher prices from tariffs, potentially slowing retail sales and, in turn, throttling back the need for inventory storage. Retailers stocked up early to get ahead of tariffs, inflating warehouse inventories, but if consumer spending falters, those inventories may unwind and further soften industrial demand. Additionally, higher interest rates have cooled sectors like housing, indirectly affecting industrial tenants (for instance, slower home sales can reduce demand for building materials and furniture distribution). Despite these challenges, the overall economy started 2025 with modest growth, and a major recession has not materialized – meaning there’s still underlying demand for industrial space, just not at the breakneck pace of the prior few years.

Flight to quality and speed to lease: Another emerging trend is a widening performance gap based on building size and quality. Larger modern warehouses have borne the brunt of the vacancy surge, while smaller facilities remain relatively tight. Since early 2023, vacancy for large buildings (100,000+ sq. ft.) jumped ~380 basis points, now over 8%, whereas mid-sized facilities (50,000–100,000 sq. ft.) saw a 230 bps rise to around 5.6%, and small buildings (<50,000 sq. ft.) only rose 120 bps to about 3.7% vacancy. In fact, demand for small-bay industrial space has been robust and supply extremely limited, keeping the vacancy in buildings under 50k at under 4%, near pre-pandemic lows. These smaller spaces are leasing much faster as well – the median time on market for sub-50k SF availabilities in Q1 2025 was just 4.8 months, versus 10–13 months for larger spaces. This indicates that tenants, especially local businesses, are quickly snapping up small industrial units, whereas big-box warehouses often sit empty longer in this softer market. For industrial architects and site planners, this divergence suggests that designing flexibility into larger sites (e.g. demising big boxes into smaller units) could be a strategic response to broaden the pool of potential tenants.

In summary, the national industrial landscape in 2025 is characterized by higher vacancies, plateauing rents, and a more tenant-favorable climate after years of landlord dominance. However, these general trends play out differently across various subtypes of industrial real estate. The following sections delve into specific flex space site plan trends, warehouse (logistics) site plan trends, and specialized/storage industrial trends, highlighting how each segment is performing and what it means for site planning and development.

Flex Space Site Plan Trends

Flex spaces – typically smaller industrial buildings often combining warehouse, light manufacturing, showroom, or office components – have shown relative resilience amid the industrial cooldown. Flex space site plans tend to prioritize versatility and accessibility, often located in business parks or urban-edge locations serving multiple small tenants. In the current market, flex properties are benefiting from limited new supply and steady demand, resulting in healthier fundamentals than some bulk warehouse counterparts.

Vacancy and supply: Nationally, the vacancy rate for flex industrial space is around 8.0%, which is on par with large logistics properties in absolute terms but represents a much smaller increase from its historic lows. Vacancies in flex buildings have risen only about 210 basis points from their all-time low during the pandemic boom. This uptick is modest considering the economic shifts and stands in stark contrast to the 460 bps surge seen in big-box logistics vacancies. The key reason is limited speculative construction in the flex segment – developers in recent years focused on massive fulfillment centers, not multi-tenant flex parks. Indeed, as of mid-2025, only about 21 million sq. ft. of flex space is under construction nationwide, versus an enormous 217+ million sq. ft. for logistics projects. This restrained supply pipeline means many local flex markets remained undersupplied. In markets with strong population and small-business growth (for example, Nashville, Jacksonville, Orlando, Tampa, Charlotte), there are acute shortages of small-bay and flex spaces, pushing vacancies in those areas even lower than the national average. Small contractors, service providers, and start-ups in these high-growth metros are vying for limited flex suites, a trend that keeps occupancy high and puts upward pressure on rents.

Rent performance: Flex spaces command premium rents per square foot relative to standard warehouses, reflecting their often higher office build-out and scarcity. As of mid-2025, flex industrial asking rents average about $18.74 per sq. ft. (triple-net) nationally – by far the highest among industrial subtypes, and about 50–70% higher than the average logistics warehouse rent. Even as overall rent growth has slowed, smaller and flex-type properties are still seeing modest rent gains. In the past year, asking rents for 10,000–20,000 sq. ft. industrial spaces (a proxy for small-bay and flex units) rose roughly 2.5%. This is a sharp comedown from the double-digit rent hikes of 2021–22, but notably better than large warehouse facilities, which saw almost no rent growth (just +0.8% year-over-year for 100k–500k sq. ft. buildings). Landlords of flex properties have been more successful in marking rents to market upon lease expirations, thanks to sustained demand and limited new competition. Many tenants in flex parks are local businesses who value location and may be willing to absorb moderate rent increases, especially after enjoying below-market rents in long-term leases that are now rolling to current market rates.

Design and site planning considerations: Architecturally, flex buildings typically feature a mix of warehouse space with a front-office portion, requiring careful site planning for both vehicular circulation (trucks and cars) and higher parking ratios than pure warehouses. With the ongoing trends, developers and planners are focusing on making flex sites even more adaptable. For instance, interiors are often designed with demising options to accommodate a range of tenant sizes. Given the robust demand for sub-50k sq. ft. spaces, new industrial parks are increasingly platted to offer smaller lot sizes or multi-tenant buildings rather than a single large building. Additionally, last-mile distribution needs in urban areas are creating a variant of flex space – facilities that can handle e-commerce fulfillment but on a smaller scale and closer to consumers. These might involve higher clear heights and improved loading docks compared to older flex designs, yet still maintain a park-like campus setting attractive to a variety of tenants.

From an investment perspective, flex industrial assets have been a safe haven in the current cycle. Their vacancies remain near historic lows (often under 5% in tight submarkets), and spaces re-lease relatively quickly if a tenant vacates. This stability, combined with higher rent per foot, can translate to strong income performance. However, investors should note that flex properties do require active management (many tenants, shorter leases) and capital for fit-out, especially as tenants often have specific office or showroom build-out needs. Overall, flex site plan trends point toward sustained demand for well-located, small-unit industrial developments. Developers who can deliver modern, flexible layouts in undersupplied markets are likely to see solid leasing velocity and rent growth, even as the broader industrial market works through a supply glut in other areas.

Crosslake Expo Center, 2 Star Flex

Warehouse Site Plan Trends (Logistics Facilities)

Warehouse site plans – especially large logistics and distribution centers – have undergone a dramatic boom and are now facing a cooling-off period. These properties, typically 100,000+ sq. ft. single-story buildings with dozens of dock doors and expansive truck courts, were the darlings of the e-commerce surge. Developers added millions of square feet of new warehouse space in the past few years to keep up with Amazon-era demand. But in 2024–2025, the tide turned: many markets are grappling with excess warehouse supply and softened tenant demand, leading to rising vacancies and more tenant-friendly conditions.

Rising vacancy and oversupply: Among all industrial segments, the logistics warehouse subtype has seen the steepest rise in vacancy. Since mid-2022, vacancy in large logistics facilities shot up by about 4.6 percentage points, now averaging above 8% nationally (and much higher in some metros). This jump has pushed warehouse vacancy to its highest level in over a decade. The cause is simple: a record wave of speculative construction overshot actual tenant requirements. Developers, flush with cheap capital and bullish demand forecasts in 2021–22, built massive distribution centers across the Sunbelt and Midwest. By late 2023, annual new deliveries peaked at roughly 150 million sq. ft. per quarter – a modern record. As those projects came online in 2024–25, net absorption failed to keep up, leaving many new buildings sitting empty.

Certain previously high-growth markets are now emblematic of this oversupply. For example, Phoenix – a metro that attracted numerous big-box warehouse projects – saw vacant space in 100k–500k SF logistics properties balloon by 19 million sq. ft. since 2019. Vacancy for mid-sized warehouses in Phoenix has blown past 20%, and an additional 8.2 million sq. ft. of similar space is still under construction (much of it speculative). At the current average absorption pace, it could take three years or more for Phoenix to work back down to normal vacancy levels. Other markets facing a prolonged glut of warehouse space include Austin, Indianapolis, Greenville/Spartanburg, San Antonio, and parts of the Inland Empire, all of which have a high volume of speculative projects in the 100k–500k SF range relative to their historical demand. These regions benefitted from pro-development policies and ample land, which allowed developers to build quickly – a double-edged sword now that demand has cooled.

Nationwide, the construction pipeline for logistics warehouses remains sizable (over 217 million sq. ft. underway as of Q3 2025), but importantly, new starts have dropped to decade lows. This means relief is in sight: as developers have pulled back, the flood of new warehouses will subside by 2026, giving tenants time to absorb the existing vacant space. Indeed, the Innowave database forecasts that quarterly supply additions will fall below pre-pandemic averages by late 2025 and hit an 11-year low in 2026. For now, though, warehouse site planning strategies are shifting to adapt to the softer market.

Rent and concessions: The era of aggressive rent hikes for big-box warehouses is over, at least temporarily. Many markets have seen flat or even declining rents for new warehouse leases in 2024–25, especially for larger boxes that are in direct competition. Nationally, landlords have lost leverage: one major industrial REIT reported that it had to give an average of 2.8% of total lease value in free rent concessions over the past year, up from virtually nothing during the 2021 frenzy. It’s now common to see 3+ months of free rent on a 5- to 7-year warehouse lease, whereas two years ago tenants had little negotiating room. For example, a tenant in the Inland Empire (Southern California) recently secured 6 months free on a ~177,000 SF newly built distribution center lease – a deal that would have been unheard of at the market peak. Overall effective rents (net of concessions) have thus come under pressure even if asking rents haven’t outright collapsed. Year-over-year rent growth for logistics facilities is roughly 0%–1%, and in some oversupplied nodes, asking rents have been trimmed to attract activity. The tenant-favorable conditions are expected to persist in the near term for big-box leases, until vacancy rates retreat to more balanced levels.

Design and strategic considerations: In this environment, developers and planners of warehouse projects are recalibrating their approach. Key considerations include:

• Avoiding overbuilding in saturated markets: Market research is paramount before green-lighting new site plans. Industrial developers are increasingly targeting build-to-suit opportunities (with committed tenants) rather than speculative projects in markets like Phoenix or Austin that are most at risk of long lease-up times. Those still pursuing spec warehouses are favoring markets with unique advantages – for example, coastal port markets or major intermodal hubs – and even then, phasing projects to align with proven demand.

• Incorporating flexibility in big-box design: As noted earlier, one way to mitigate risk is to design large warehouse shells that can be divided for multiple tenants. A 500,000 SF distribution center might be built with extra knock-out panel locations or additional storefront entrances so it can accommodate two or three mid-sized tenants if a single large user doesn’t materialize. This strategy recognizes the current reality that smaller 50k–200k SF users are still active, while million-square-foot e-commerce tenants are rarer than a couple of years ago.

• Advanced building specs as differentiators: In a more competitive leasing market, high-quality site plan features can make a warehouse stand out. Modern logistics site plans now emphasize maximum efficiency: ample trailer parking, expanded truck courts for easier maneuvering, higher clear heights (36’ to 40’ clear is becoming standard for new big boxes), ESFR sprinkler systems, and sustainable design features. For instance, facilities with the ability to install solar panels, LED lighting, and energy-efficient HVAC can appeal to corporate tenants with ESG goals. Some developers are even designing spec warehouses with extra car parking or structural support for mezzanines, anticipating conversion to partial fulfillment or distribution centers with in-house pick/pack mezzanine levels.

• Location and last-mile considerations: While mega-warehouses in exurban greenfields were the hallmark of the recent boom, going forward there’s rising interest in infill and last-mile warehouse site plans. These tend to be smaller footprint (often under 200k SF or even multi-story in dense cities) but closer to end consumers. The goal is faster delivery times in urban areas. Although multi-story warehouses (with truck ramps to upper levels) are still rare in the U.S., a few projects in places like Seattle, New York City, and Los Angeles are testing this model. From an architectural perspective, these innovative site plans must solve new challenges such as structural load for truck ramps, freight elevator logistics, and tight urban site configurations. They represent a future path for warehouse development in land-constrained metros, complementing the traditional single-story logistics behemoths.

  
  

In summary, warehouse site plan trends reflect a market in rebalancing. Developers are exercising caution, and those planning new projects must differentiate their sites through location or design excellence. For the next 12–18 months, many landlords of big warehouses will be focused on filling existing space – using incentives and creative deal structures – rather than breaking ground on new ones. However, the long-term outlook for logistics real estate remains positive: once the current oversupply is absorbed, the continued growth of e-commerce, decentralized inventory strategies (e.g. safety stock warehousing), and potential onshoring of manufacturing will ensure that well-positioned warehouses regain their stature. The lesson for stakeholders is to plan and invest with a strategic eye on the demand-supply cycle, timing projects to deliver into recovery rather than peak supply, and designing warehouses that can adapt to a range of tenant needs and market conditions.

3 Star Industrial Warehouse

Specialized Industrial and Storage Site Plan Trends

Not all industrial properties are built purely for distribution. Specialized industrial facilities – such as manufacturing plants, research & development centers, data centers, and cold storage warehouses – form a crucial sub-sector with distinct dynamics. Likewise, storage site plans can refer to properties like bulk storage warehouses or even self-storage facilities (though the latter is often categorized separately). In the context of the broader industrial market, specialized and storage-oriented properties have generally fared better than the big generic warehouses, thanks to their built-to-suit nature and more stable demand drivers.

Tight vacancy and measured growth: Specialized industrial space is currently the tightest segment of the market. National vacancy for specialized facilities (which include manufacturing-heavy properties and specialized storage like cold chain logistics) is only about 4.2%. This low vacancy reflects the fact that much of this inventory is mission-critical space – factories or specialized warehouses that companies don’t vacate easily. Even during the recent industrial building spree, developers added relatively little speculative specialized space. In the first half of 2025, effectively no significant new specialized industrial deliveries occurred on spec, and only ~57 million sq. ft. is under construction (a fraction of the logistics pipeline). Vacancies have inched up off record lows, but only by about 110 bps from their historic trough – a mild rise considering economic headwinds. In many regions, manufacturing facilities are near full utilization, especially for sectors like automotive, aerospace, and food processing that have seen resilient demand. Similarly, cold storage warehouses (refrigerated distribution) remain in high demand due to growth in online groceries and pharmaceuticals, often running at very low vacancy since they’re expensive to build and require specialized tenants.

Rent and investor interest: Rents for specialized industrial properties tend to be on par with or slightly above general warehouse rents. Nationally, the average asking rent for specialized industrial is about $11.89 per sq. ft., versus ~$11.26 for logistics warehouses. This small premium likely understates the true rent differences, since many specialized deals are build-to-suit leases not openly marketed. In reality, a high-tech R&D facility or a pharma-grade cold storage building can command strong rents (and often involve tenant improvement packages in the tens of millions). Importantly, rent growth in specialized assets has been more stable and positive even when big-box rents stagnated. Owners of manufacturing facilities have been able to push rents gradually upward, especially upon renewal or re-tenanting, because there are few alternatives for tenants if they need comparable space. The Innowave data shows that rent growth in the small-bay and specialized segment remained positive through early 2025, a sharp contrast to the rent declines seen in some large warehouse deals. Investors have noticed this resilience: specialized industrial properties (for example, a food processing plant or a biotech lab/industrial hybrid) are often held long-term by users or specialized REITs, but when they do trade, they tend to attract competitive bids due to their stable occupancy and often long lease terms.

Site planning for specialized uses: From an architectural and planning perspective, specialized industrial site plans are highly tailored to their end use, which inherently limits speculative development. A few examples illustrate this:

• Manufacturing Plants: These may require heavy floor loads, specific bay spacing for production lines, significant power supplies, water/wastewater infrastructure, and sometimes rail access. The site plan might include large utility yards, storage for raw materials, or even adjacent land for future expansions. Because such features are unique, developers rarely build a manufacturing facility without a committed end-user. This has kept speculative supply in check and vacancy low in this subtype.

• Cold Storage Warehouses: These are a subset of logistics, but with very specialized building systems (refrigeration, insulated panels, backup generators) and often higher clear heights to maximize pallet positions. Site plans for cold storage need robust truck docking areas (to maintain cold chain integrity during loading) and sometimes smaller building footprints (as these facilities can be taller and multi-level internally). The surge in e-commerce groceries has driven build-to-suit development by companies like Lineage Logistics and Americold, but speculative cold storage is rare. Thus, vacancy in cold storage remains extremely low nationally, and rents are high (often double normal warehouse rents on a per-cubic-foot basis, though typically measured per pallet position or by other metrics in leasing).

• Flex/R&D and Tech Manufacturing: In markets like Silicon Valley, Boston, or Raleigh-Durham, some industrial site plans blur into lab or tech space. These “flex/R&D” buildings might offer high-end infrastructure (clean rooms, labs, heavy ventilation) and more office-like environments. They often reside in campus-style industrial parks with landscaping and amenities, reflecting the need to attract skilled workers in addition to providing functional production space. Despite being specialized, these properties can fall under “flex” in some classifications. Their trend has been strong as well – vacancy for high-tech industrial/R&D space is very low in innovation hubs, thanks to growth in sectors like semiconductor manufacturing (boosted by federal initiatives) and life sciences.

• Bulk Storage and Yard Facilities: Another niche is facilities primarily used for storage of materials or equipment, sometimes with large outdoor yard components (for example, construction equipment depots, oilfield equipment yards, etc.). These often don’t even have large buildings – maybe a small warehouse plus acres of paved yard. They see demand based on infrastructure and construction cycles. During the recent boom, even these niche properties were snapped up (e.g., container storage yards near ports). As of 2025, they remain a specialized but important part of the industrial landscape, often benefiting from their strategic locations (near ports, highways, or job sites) and lack of alternatives.

Storage site plans (self-storage angle): While not the primary focus of this article, it’s worth noting trends in self-storage (mini-storage) as part of “storage site” trends, since the term can overlap. The self-storage industry experienced high occupancy and rent growth during 2020–2022, prompting a wave of new facility development in many cities. By 2025, that sector too has seen some normalization – new supply in self-storage has increased vacancy modestly in certain markets. However, like specialized industrial, self-storage development is very localized (tied to demographics and housing trends) and often requires careful site planning to maximize density (multi-story climate-controlled buildings in urban areas, for instance). For stakeholders interested in “storage site plans,” the key takeaway is that specialized storage uses perform best when custom-tailored – whether that’s a cold storage warehouse built for a grocery distributor or a self-storage facility designed to meet neighborhood demand. Generic approaches in this space are less common, and thus oversupply is less of a concern than in the broad warehouse category.

Outlook for specialized industrial: Going forward, several macro forces could bolster specialized industrial development. Onshoring and reshoring of manufacturing is a major theme – as companies and policymakers push to bring critical production back to the U.S., we may see new factories and advanced industrial plants built in coming years. Protectionist trade policies and lessons from supply chain disruptions have indeed prompted more interest in domestic production. If even a fraction of industries like semiconductors, pharmaceuticals, or renewable energy components relocate manufacturing stateside, demand for specialized facilities (and the land to build them) will surge. For example, the CHIPS Act is already spurring billions in new chip fabs – highly specialized industrial campuses that will be constructed over the next decade. Similarly, infrastructure investments and green energy projects will require specialized manufacturing (think EV battery plants, modular construction factories for housing, etc.). Each of these will involve complex site plans (large sites, significant power/water needs, environmental considerations) and will likely be developed in partnership with government incentives and private investment. From an investor standpoint, backing these projects can be capital intensive but yields long-term leases with credit tenants and often government support.

In short, specialized and storage-oriented industrial site trends are defined by stability and strategic growth. These properties don’t experience the same booms and busts as generic warehouses because they’re less likely to be built speculatively. For stakeholders, the focus here is on identifying emerging needs (like cold storage or manufacturing for a new industry) and being ready to develop or retrofit sites accordingly. When done right, specialized industrial projects can offer durable income and serve critical roles in the supply chain or production ecosystem.

Metro-Level Differences in Industrial Site Trends

Industrial real estate trends can vary widely across different metropolitan areas. Local economic drivers, land availability, infrastructure, and regulatory environments all shape how industrial site plans are executed and how each market performs. As of 2025, a few clear patterns and standout examples have emerged:

• Sunbelt and Midwest growth markets – now high supply hangovers: Many of the markets that led the charge in new industrial development are now dealing with the aftermath of that boom. Cities such as Dallas-Fort Worth, Atlanta, Phoenix, Indianapolis, Austin, and Greenville-Spartanburg saw record levels of construction over the past few years. These areas were attractive due to ample land, business-friendly policies, and growing populations. For a time, they also enjoyed robust tenant demand (especially from e-commerce and third-party logistics firms). However, as the cycle turned, these same markets are posting some of the highest vacancy and availability rates in the nation. For instance, Dallas-Fort Worth – one of the nation’s largest distribution hubs – has over 34 million sq. ft. under construction (the most of any U.S. metro), and its vacancy rate has edged up as new supply hits the market. Austin and San Antonio, smaller markets by comparison, each have construction pipelines equal to 7–9% of existing inventory, among the highest ratios in the country. In Greenville/Spartanburg (South Carolina) – a manufacturing and logistics hub – the rapid development of mid-sized warehouses has created a tenant’s market, with vacancy climbing significantly and landlords competing for a limited pool of tenants. These Sunbelt/Midwest markets with fewer development constraints are experiencing a record supply wave that could take over two years to absorb fully. Industrial planners in these regions are often contending with suddenly plentiful options for tenants, meaning site plans need to emphasize unique advantages (location by a port/interstate, superior design, cheaper rents, or customizations) to win deals.

• Coastal and port-centric markets – resilient but watching trade volumes: Coastal gateway markets like Los Angeles, Orange County, the Inland Empire, Northern New Jersey, South Florida, and Seattle started from a point of very low vacancy (often 2–5%) and saw relatively less new construction (due to land constraints and higher costs). Even after the recent softening, many of these markets remain tighter than the national average – for example, Los Angeles County’s vacancy is still only in the mid-3% range, and Northern New Jersey around 5%, as of mid-2025 (based on industry reports). However, these port-proximate markets are highly sensitive to global trade flows. The West Coast ports in particular have had a volatile few years: tariffs and supply-chain snarls led to surges and drops in cargo. The ongoing U.S.-China trade dispute has injected uncertainty. In May 2025, import volumes through the largest West Coast ports fell sharply, which is a warning sign for warehouses from Los Angeles/Long Beach to Seattle that rely on import distribution. So far, these markets have held up – for instance, the Inland Empire (east of LA) actually saw improved leasing activity in early 2025 as some tenants took advantage of slight rent dips to secure space. But if trade volumes remain depressed, even these tight markets could see an uptick in vacancy. Site planning in coastal markets increasingly involves logistics innovation (multi-story warehouses, automation) to squeeze more throughput from limited land, as well as contingency planning for shifts in supply chain routes (e.g., East Coast ports gaining share, which could bolster markets like Savannah or Charleston).

• Regional manufacturing hubs: Markets like Detroit, Cleveland, Milwaukee, Louisville (and many smaller Midwest cities) have significant specialized industrial bases (automotive, aerospace, etc.). These markets did not experience the same warehouse oversupply; their story is more about industrial reuse and modernization. Vacancy in many of these areas’ legacy industrial buildings remains low, and new development has been focused on modernizing old plants or building specific facilities (like electric vehicle battery plants in the Midwest “Battery Belt”). For instance, Detroit industrial vacancy is relatively low (despite a huge industrial inventory) because little speculative logistics was built there compared to, say, Columbus or Indianapolis. As automotive retools for EVs, site plans in these cities revolve around redeveloping brownfields and optimizing existing industrial parks, often with public-private collaboration.

• High-growth Southeast and Mountain West cities: In places like Nashville, Charlotte, Orlando, Salt Lake City, and Denver, industrial demand has been driven by both population growth and diversification of the economy. These metros did see a lot of new warehouses, but they also face strong ongoing demand, especially for smaller industrial and flex space. Nashville and Charlotte, for example, have very tight small-bay markets – small local businesses are expanding, and construction of new small units hasn’t kept up. In these high-growth areas, we observe a split: large distribution center vacancies might be up a bit, but anything under 50k SF is snapped up quickly. This suggests a misalignment in development – plenty of big boxes were built, but what the local economy also needs is more mid-sized, service-oriented industrial spaces (for construction companies, suppliers, etc.). Municipalities in these regions are taking note and some are encouraging mixed industrial parks that include a couple of big buildings along with clusters of smaller flex buildings to support diverse business needs. For example, a new industrial park outside Orlando might feature one 500k SF cross-dock warehouse and a row of 20k SF flex/light industrial units to create a more balanced ecosystem.

• Market rankings and performance extremes: According to recent data, markets like Chicago and Atlanta remain among the nation’s largest industrial markets by inventory, and they continue to see high absolute absorption of space (companies are still expanding there due to their strategic locations and transportation networks). However, even these giants saw vacancy creep up with the influx of new supply. On the flip side, some smaller markets that had very limited development (due to being secondary locations) are relatively unchanged by the national cycle – places like Honolulu, Albuquerque, or Scranton may have low industrial vacancy and stable rents simply because hardly any new buildings were added and local demand is steady.

  
  

In essence, metro-level differences remind us that real estate is always local. Industrial site planners and investors must pay attention to the on-the-ground conditions: Who are the demand drivers in this city? Is land supply constrained or ample? Are we building for a future tenant that realistically exists here? The current cycle has taught some tough lessons – for instance, just because Amazon absorbed millions of sq. ft. in one city in 2021 doesn’t mean a similar wave of tenants will be there in 2024. Those planning industrial projects need to be mindful of these regional nuances. Markets with high vacancy and construction (like Phoenix) will require patience and perhaps creative re-use of space (could some empty warehouses serve as film studios or manufacturing sites?). Markets with pent-up demand (like places lacking small flex space) present opportunities for targeted development, even when national headlines sound gloomy.

Strategic Planning Considerations and Forward-Looking Outlook

With the industrial sector at an inflection point, stakeholders should adopt strategic approaches to site planning and investment. Here are key considerations and a look at what’s on the horizon:

1. Align development timing with the cycle: The industrial construction boom is winding down – new project starts have fallen sharply, and by 2026 the delivery volume of new space will likely hit its lowest in over a decade. This means that projects planned now will be delivering into a much tighter market. Vacancies are expected to peak by late 2025 (potentially just under 8% nationally) and then improve through 2026 as the supply pipeline empties. For developers and investors, this suggests that entitling land and designing projects during this slowdown could pay off if those projects open into a rebounding market. However, caution is warranted: one should target product types and locations that have demonstrated durable demand. It may be wise to focus on build-to-suit deals in the next year or two (securing a tenant before breaking ground), unless you’re in a market with clear signs of undersupply in a specific segment (e.g., a lack of modern cold storage in a food distribution hub).

2. Embrace flexibility and adaptive reuse: As noted, designing flexibility into industrial site plans can future-proof assets. Additionally, consider adaptive reuse opportunities – for instance, could a vacant big-box retail store be demolished or converted into a last-mile warehouse? Could an obsolete warehouse be retrofitted as a light manufacturing site for a different industry? Municipalities are increasingly open to creative zoning adjustments to support industrial uses, given the job creation aspect. Industrial architects can look at older facilities with an eye to modernization: adding loading docks, increasing power capacity, or even raising roof heights (a complex but sometimes feasible undertaking) to make an old building competitive with new product. Multi-story or vertical solutions might also gain traction in high-cost urban markets; designing a site plan with potential for expansion (such as a parking lot that could house a second building or an on-site garage to free up more building footprint) is a forward-looking move.

3. Factor in technology and automation: The next phase of industrial development will likely be influenced by automation, robotics, and smart logistics systems. Site planners should account for features like drones, autonomous yard trucks, and robotic material handling. This could mean reserving air rights or open spaces for drone landing pads, designing extra trailer storage for automated truck convoys, or ensuring floors can handle automated guided vehicles (AGVs) and high rack loads. Power and data infrastructure are another consideration – modern warehouses require robust connectivity (5G, fiber) and often backup power for automation. By integrating these elements into site plans now, developers can make their projects more attractive to cutting-edge tenants and future-proof against labor market uncertainties.

4. Sustainability and regulations: Sustainability has moved from a buzzword to a concrete requirement for many corporations and local governments. Industrial buildings are being asked to reduce their environmental footprint – through solar panel installations, energy-efficient lighting and HVAC, rainwater harvesting, and EV charging for trucks and employee vehicles. Some jurisdictions also have regulations on truck traffic, noise, or stormwater that directly impact site planning (for example, requiring idle-reduction technologies or specific landscaping buffers). Factoring these into the early design phase is essential. While sustainable design can have upfront costs, it often pays for itself via incentives or operating savings, and it makes properties more resilient to future regulation changes. Green industrial parks, featuring elements like solar-covered parking or on-site renewable energy generation, could become a differentiator as companies aim to decarbonize their supply chains.

5. Investment strategy – diversify and specialize: For investors in industrial real estate, the current environment calls for both caution and opportunism. Diversifying across asset types (flex, warehouse, specialized) and geographies can hedge against localized downturns. As we’ve seen, a portfolio heavily concentrated in, say, big Atlanta warehouses might be underperforming right now, whereas one with a mix of small infill properties in several cities could be more stable. Some investors are specifically targeting specialized assets (like truck terminals, outdoor storage yards, or last-mile facilities) because these niches have high demand and little new supply. Others are watching the distress in the big-box segment for opportunities – there may be cases where newly built warehouses in overbuilt markets can be acquired at a discount, anticipating that values will recover in a few years once the excess is absorbed. Cap rates for top-tier industrial assets have risen from their 2021 lows (no more 4.5% cap rates – now closer to 5.5–6% in many cases), which actually can make acquisitions more attractive for investors compared to the frothy pricing of a couple years ago. The key is underwriting with realistic assumptions: lower near-term rent growth, the possibility of longer lease-up times, and the need to offer tenant improvements or free rent to secure tenants. Those who factor these into their plans can still achieve solid risk-adjusted returns, especially given that industrial assets over the long run have shown some of the strongest rent growth among property types.

6. Watch macro indicators: Industrial real estate does not operate in a vacuum. Keep an eye on macroeconomic trends like consumer spending, inventory levels, and geopolitical developments. For example, if inflation and interest rates stabilize or fall, economic growth could pick up, translating to more goods movement and warehouse demand. Conversely, an unexpected recession would soften demand further and potentially create a truly tenant-dominated market. The Innowave database’s forecast scenarios suggest that in a mild recession case, national vacancy could push into the 8–9% range and rents could see their first material decline since the Great Recession. Knowing this, contingency planning is wise: have exit strategies and reserve budgets in case leasing takes longer than expected. At the same time, be prepared for upside – an expansionary fiscal environment or continued e-commerce growth could reignite absorption faster than anticipated.

In conclusion, the U.S. industrial sector in 2025 is experiencing a healthy normalization. After an extraordinary expansion, the market is pausing to digest new supply and recalibrate to sustainable growth levels. Industrial site plans – whether for a modest flex building or a million-square-foot warehouse – must be crafted with an eye to current realities and future possibilities. Stakeholders who stay informed with data (such as the Innowave industrial database) and remain nimble in strategy will be best positioned to capitalize on opportunities. As the saying goes, industrial real estate is all about “location, location, and timing.” By understanding trends in flex space site plans, warehouse site plans, and storage/specialized site plans at both national and local levels, one can make savvy decisions in planning or investing. Looking ahead, the long-term drivers (e.g. supply chain modernization, population growth, technology, and onshoring) suggest that industrial properties will continue to be a cornerstone of the real estate world. The next few years offer a chance to plan and build the next generation of industrial facilities – ones that are more flexible, efficient, and resilient. Those forward-looking considerations will ensure that today’s site plans become tomorrow’s successful industrial projects, ready to support the nation’s logistics and production needs in the decades to come.

Sources: All data and trends cited are based on the Innowave industrial market database and analysis of Q3 2025 U.S. industrial real estate metrics, among other referenced figures throughout the article.

4 Star Industrial Warehouse