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Industrial Sales Hit $68B as Investors Navigate a Divided Market

Industrial Sales Hit $68B as Investors Navigate a Divided Market

Industrial sales surged to $68B in 2025, but rising cap rates point to a market increasingly split by asset quality.

Nina Dale
January 15, 2026

Together with

Good morning. Industrial CRE wrapped up 2025 with $68B in sales, the strongest year since 2022. But beneath the headline, cap rates reveal a market splitting between top-tier and lower-quality assets.

Today’s issue is sponsored by PropRise—Turn any document into a filled underwriting model in minutes so you can analyze 3x more deals with the same team.

🎙️Don’t miss an inside look at the institutional mindset. Bridge Investment Group’s Colin Apple breaks down multifamily underwriting, risk, and the next cycle.

CRE Trivia 🧠

Which U.S. city was ranked the best place to find a job in 2026?

(Answer at the bottom of the newsletter)

Market Snapshot

S&P 500

GSPC

6,926.97

Pct Chg:
-0.53%

FTSE NAREIT

FNER

773.50

Pct Chg:
+0.95%

10Y Treasury

TNX

4.144%

Pct Chg:
-0.027

SOFR

30-DAY AVERAGE

3.70%

Pct Chg:
-0.00

*Data as of 1/14/2026 market close.

Sector Split

Industrial Sales Hit $68B as Investors Navigate a Divided Market

Industrial property sales jumped in 2025, but diverging cap rates suggest two very different stories playing out beneath the surface.

The yield divide: Industrial sales hit $68.4B through November 2025, the strongest year since 2022, per Crexi. But closed-deal cap rates rose to 7.33%, signaling weaker demand for lower-tier assets, while asking caps dipped to 7.28%, widening the buyer-seller gap.

The market is bifurcating: Top-tier logistics assets in growth markets are trading at 4.5% to 6.5% yields, while lower-quality or vacant properties push 7% to 8%. Investors are pricing risk more aggressively for commodity industrial in oversupplied metros, while still bidding up core distribution hubs.

Sale prices slip: Average sale prices slipped 2% month over month to $98.75 per square foot, flat year over year, while asking prices edged down just 0.4% to $121.84. The gap shows sellers staying bullish on high-quality assets as buyers grow more selective, weakening demand for generic space.

Fundamentals stabilizing: Vacancy held between 7.1% and 7.5% in Q3 2025—flat QoQ, but still the highest since 2013. Construction starts fell 13.4% YoY, easing oversupply fears, while net absorption jumped to 45.1M SF, signaling a gradual market rebalance.

Gaining favor: Build-to-suit projects now make up 39% of the construction pipeline, up from 34% a year ago. Developers are favoring pre-leased deals amid leasing caution, signaling a shift toward tenant-specific strategies to reduce risk.

Tenant leverage: National asking rents averaged $10.10/SF Q3 2025, up 1.7% YoY. December asking rents held at $14.20, while effective rents fell 2.9% to $13.24, signaling growing tenant leverage outside prime locations.

➥ THE TAKEAWAY

Pick your spots: Industrial is no longer one-size-fits-all. As fundamentals normalize, investors should target infrastructure-rich, supply-constrained submarkets and pre-leased projects poised to lead rent growth in 2026.

TOGETHER WITH PROPRISE

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*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

✍️ Editor’s Picks

Spreadsheets don’t scale: Manual tracking slows pipeline and kills deals. Download our white paper to discover the new standard for transaction management and accurate, automated math. (sponsored)
Niche play: Bain Capital closed a $3.4B real estate fund to target niche sectors like marinas, powered land, and open-air retail.
M&A activity: CRE brokers are gearing up for a lucrative year as a surge in corporate mergers drives demand for real estate consulting, rightsizing, and portfolio strategy services.
Powell pressure: Jamie Dimon and global leaders are defending Fed Chair Powell amid Trump’s criminal probe, raising alarms over central bank independence.
Metro shake-up: Yardi Matrix’s 2026 report spotlights diverging fundamentals and rising risks reshaping investment outlooks across U.S. metros.
Turning point: Global REITs are set for a rebound in 2026 as valuations hit 20-year lows, new supply shrinks, and demand stays strong.
Flat rents: SFR growth nearly flatlined in 2025, dragged down by rising vacancies, affordability pressures, and softening demand.

🏘️ MULTIFAMILY

Regulation return: Rent control is reemerging in Massachusetts despite decades of data showing it stifles housing supply, discourages investment, and drives up rents elsewhere.
Mamdani effect: NYC multifamily sales fell sharply in Q4 as political uncertainty from newly elected Mayor Zohran Mamdani spurred long-time owners to sell, even as investor appetite remained strong.
Silver strategy: Bain Capital and Capitol Seniors Housing secured $48M in refinancing for two upscale senior housing communities near NYC.
Developer drama: Michael Stern is hit with a fraud suit from a former partner in a Miami Beach project, compounding legal battles as his defamation lawyer quits.
Healthy living: Fitness centers have cracked the top five most-wanted apartment amenities, as renters increasingly prioritize health, lifestyle, and tech-driven features.

🏭 Industrial

Power promise: Microsoft pledged to fully cover its data center electricity costs to ease public concern over rising utility bills tied to AI expansion.
No bubble: Digital Realty’s CEO says data center demand is outpacing supply as AI drives massive growth, not a bubble.
Southern expansion: Marcus Partners makes its Atlanta industrial debut with the acquisition of the 538,500 SF Creekside Distribution Center.
Prime warehouse: Amazon leased a 615K SF former 99 Cents Only warehouse in Commerce, marking LA’s largest Q4 industrial deal.

🏬 RETAIL

Game over: GameStop is shuttering 470 stores as its CEO pursues a $35B stock award tied to a lofty $100B valuation goal.
Luxury lease: Ashkenazy Acquisition Corp. bought the ground lease for Neiman Marcus’ Beverly Hills flagship for $50M, the city's largest retail deal in years.
Luxury collapse: Saks Global filed for Chapter 11 to restructure $2.2B in debt and shrink its store footprint after its luxury merger unraveled.
Flushing find: Acadia and TPG acquired the 555K SF Shops at Skyview in Flushing from Blackstone for $425M, marking a major retail deal in one of NYC’s fastest-growing neighborhoods.

🏢 OFFICE

Market move: Highwoods Properties spent $108M on Dallas and Raleigh office assets, betting on strong leasing and Sun Belt growth to boost its national portfolio.
Tech turnaround: Realm and Cannae bought a foreclosed San Francisco office for $10M, betting on AI-fueled demand to drive the city’s ongoing office recovery.
Valley momentum: Office leasing in Silicon Valley is expected to gain momentum in 2026, as AI and tech firms like OpenAI seek large, high-quality spaces.
Occupancy turns: Northern Virginia recorded its first office occupancy gain since 2019, signaling renewed tenant demand and market momentum.

🏨 HOSPITALITY

Packaged appeal: All-inclusive hotel stays are outperforming national averages, driven by luxury independents in the Northeast.
Uptown upgrade: Cawley Partners and Alamo Manhattan are converting a 27K SF Uptown Dallas office building into a 140-room hotel, continuing their push to reposition aging assets in a tight urban market.

📈 CHART OF THE DAY

U.S. multifamily demand hit an all-time high in 2025 with 22.4M rental households, driven by limited homeownership access and steady structural demand.

CRE Trivia (Answer)🧠

According to WalletHub, Scottsdale, AZ ranked No. 1 overall for jobs in 2026

Industrial Sales Hit $68B as Investors Navigate a Divided Market

Industrial sales surged to $68B in 2025, but rising cap rates point to a market increasingly split by asset quality.