Large-Format Warehouse Leasing Roars Back Across the U.S., Driving Strategic Moves and Investor Interest
Large-format industrial leasing is experiencing a major resurgence in the United States, as demand for warehouses exceeding 500,000 square feet surged in the second half of 2025. New research from Cushman & Wakefield highlights a significant rebound in big-box leasing activity after a brief slowdown in 2023 and 2024, signaling renewed confidence among occupiers and investors alike.
The report, Large-Format Deals Return, reveals that deals for facilities larger than 500,000 square feet increased by 32% year over year. Much of this demand came from third-party logistics providers (3PLs) and manufacturers, which together accounted for nearly two-thirds of the leasing activity in this segment. Overall, 113 million square feet of net absorption occurred in newer, larger warehouse and logistics facilities, representing 64% of the total net absorption nationwide.
“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. We are seeing a structural shift in how companies approach industrial real estate, particularly for large-scale operations.”
Consolidation and the Flight to Quality
The Cushman & Wakefield research highlights a growing trend of consolidation among occupiers. Many companies are exiting multiple smaller, outdated warehouses and relocating to modern Class A facilities that offer higher clear heights, stronger power capacity, and infrastructure optimized for automation and robotics. This “flight to quality” trend is reshaping the industrial landscape, as tenants prioritize efficiency, scalability, and long-term operational flexibility.
Build-to-suit (BTS) development is a critical part of this trend. In 2025, BTS leasing rose by 11%, with nearly 20% of all large-format leases tied to projects built specifically to tenant specifications. Large BTS projects currently under development increased 14% year over year, underscoring the importance of customized, high-quality spaces in driving net absorption and market growth. According to Price, “Companies are no longer simply looking for space to occupy—they are seeking facilities designed for operational efficiency and future-proofing, which is fueling demand for purpose-built warehouses.”
Cost Pressures Reshape Location Choices
Another key driver of the resurgence in large-format leasing is cost sensitivity. With rising rents and limited availability in premium coastal markets, companies are increasingly seeking affordable alternatives in inland or secondary markets. 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. This shift reflects a strategic focus on balancing operational efficiency with overall occupancy costs.
“Occupancy is tightening, and new supply is limited, which is forcing tenants to become more deliberate about location and design,” said Price. “We are observing a strong emphasis on total cost of occupancy, long-term operational performance, and access to transportation networks, which is reshaping the geography of industrial demand.”
Implications for Occupiers and Investors
The return of large-format leasing has significant implications for both occupiers and investors. Vacancy rates for warehouses larger than 500,000 square feet declined by 140 basis points year over year, reflecting the tightening market. Additionally, user-purchase activity reached 36.7 million square feet in 2025—the highest level seen in a decade—highlighting the growing interest among tenants in acquiring their own facilities rather than leasing.
For investors, these trends indicate a favorable environment for capital deployment. With fewer large speculative projects in the pipeline and accelerating demand for high-quality industrial assets, occupancy is expected to improve while rent growth accelerates, particularly for modern facilities in strategic locations. Well-located, high-specification warehouses are attracting increased investment, generating healthy net operating income growth and reinforcing the long-term value proposition of industrial real estate.
“High-quality industrial assets are becoming increasingly attractive to investors,” Price added. “As tenants consolidate and seek purpose-built space, the combination of limited supply, rising demand, and strategic location advantages is creating a very favorable investment environment.”
Outlook for 2026 and Beyond
Looking ahead, the large-format warehouse market is poised for continued expansion. The combination of consolidation, build-to-suit development, cost-conscious location decisions, and investor interest creates a dynamic environment with multiple growth drivers. Analysts expect that these factors will continue to support absorption, occupancy gains, and rent appreciation, particularly in inland logistics hubs and emerging industrial corridors.
Moreover, the integration of automation, robotics, and advanced warehouse technologies is likely to accelerate demand for modern, high-clearance facilities. Companies are increasingly focused on operational efficiency, scalability, and resilience, making large-format, purpose-built warehouses central to their logistics strategies. As a result, the market is likely to see sustained momentum in both leasing and investment activity throughout 2026 and beyond.
In conclusion, the Cushman & Wakefield report underscores a robust resurgence of large-format industrial leasing in the U.S., driven by consolidation, quality upgrades, and strategic market selection. For occupiers, this trend offers opportunities to optimize operations and reduce costs, while investors can capitalize on strong demand and limited supply to secure long-term growth in industrial assets. The return of the big-box tenant is more than a short-term rebound—it reflects a structural transformation in how companies and investors view large-scale industrial real estate.
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